March 2015 • Issue 59

The

PIOGA pressThe monthly newsletter of the Pennsylvania Independent Oil & Gas Association

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(Continues on page 2)

®

Governor Tom Wolf unveiled his proposed state budget onMarch 3, a $33.8-billion spending plan that represents an8.7-percent increase over the current budget that expires

June 30. The ambitious proposal features a $1-billion increase ineducation spending, reduction of the corporate net income taxfrom 9.99 percent to 5.99 percent, increase in the personalincome tax from 3.07 to 3.7 percent, increase in the state salestax from 6 to 6.6 percent and an expansion to cover more goodsand services, reduction in property taxes by about 50 percent,

Governor Wolf’s proposed budgetMore for DEP, more for DCNR and a severance tax too

and more taxes on tobacco products.As described in the accompanying article, the new

Democratic governor also wants a severance tax on natural gasof 5 percent plus 4.7 cents per mcf.

All in all, Wolf is proposing approximately $5 billion in newtaxes, or a combined increase in taxes of 16 percent.

“It’s time to do something different and work together to getthe state back on track,” Wolf said in his budget address. “Ourbudget should be as bold and ambitious as Pennsylvania hasbeen for over 300 years.”

The reaction from leaders of the Republican-controlled

Details of of Wolf’s severance tax

Attempting to fulfill one of his campaign pledges,Governor Tom Wolf is proposing a natural gas severancetax of 5 percent plus 4.7 cents per mcf as part of his

budget package. The governor claims the tax would generateapproximately $1 billion annually, with most of that goingtoward public education.

“Natural gas production is growing faster in Pennsylvaniathan anywhere else in the country,” Wolf said in his March 3budget address. “Yet, we are the only major producer of naturalgas that does not ask drillers to pay their fair share or provide areturn on our resources.”

Wolf rolled out his “Pennsylvania Education ReinvestmentAct” in mid-February with a statewide tour of schools, and atone point he warned that the alternative to his tax would be adrilling ban.

Said to be modeled after WestVirginia’s severance tax, Wolf’s planwould do away with the impact fee cre-ated under Act 13 of 2012. The impactfee paid annually by operators ofunconventional gas wells last year gen-erated $224.5 million, the majority ofwhich went to communities and coun-ties where natural gas development isoccurring, with a share distributedamong a variety of state agencies andprograms. The governor’s proposed

PIOGA at the Congressional Call-Up . . . . . . . 4Harrison v. Cabot decision . . . . . . . . . . . . . . . 6Winter Meeting recap . . . . . . . . . . . . . . . . . . . 9Aggregation ruling favors industry . . . . . . . . 12DEP revamps its advisory panels . . . . . . . . . 15PIOGA’s newest board member . . . . . . . . . . 18February Spud Report . . . . . . . . . . . . . . . . . 20FAA proposes drone regulations. . . . . . . . . . 23Insurance smooths pipeline kinks. . . . . . . . . 25Taxing the oil and gas industry . . . . . . . . . . . 26Accredited safety training . . . . . . . . . . . . . . . 29

FracFocus updates announced. . . . . . . . . . . 30LNG tax increase reversed . . . . . . . . . . . . . . 30PIOGA Member News . . . . . . . . . . . . . . . . . 312014 activity statistics . . . . . . . . . . . . . . . . . . 32Unconventional production still climbing . . . . 32Oil & Gas Trends. . . . . . . . . . . . . . . . . . . . . . 36New members. . . . . . . . . . . . . . . . . . . . . . . . 38Calendar of Events . . . . . . . . . . . . . . . . . . . . 39PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 39

Governor Wolf delivers his budget address to a joint session ofthe General Assembly on March 3. (Associated Press photo)

Page 2 The PIOGA Press

Budget: Continued from page 1

General Assembly could be summed up by comments fromSenate President Pro Tempore Joe Scarnati, who called it “a verybad plan,” and from Speaker of the House Mike Turzai, whodescribed the proposal as “disrespectful of people’s hard-earnedtax dollars. He wants to take so much out of their pockets.”

The conservative Commonwealth Foundation said the impactof Wolf’s budget would cost the average Pennsylvania family$1,450 a year in what would be the largest tax hike in state histo-ry.

As far as agencies and programs related to the oil and gasindustry, the proposed budget for the Department ofEnvironmental Protection would increase by 3 percent to $147million. An estimated $10 million would be earmarked from sev-erance tax revenue for additional inspection and oversight of theindustry. Acting Secretary John Quigley said 50 additionalinspectors would be hired, spread across all DEP program areas.

The Department of Conservation and Natural Resourceswould see a bump of 2.4 percent in funding to manage the 120state parks and 2.2 million acres of state forest land. The totalDCNR budget would be $342.6 million, including $34 millionfrom the general fund.

DCNR initiatives under the proposed budget would include:• A monitoring program to track, detect and report on the

impacts of shale gas development on state forest lands to contin-ue to improve management practices.

• A major upgrade of the environmental review tool that iden-tifies threatened and endangered species for protection.

• Improvements in seismic monitoring to enhance the sophis-

tication of the department’s geological information.• An auditing program to ensure the Commonwealth is ade-

quately compensated for shale gas activities on DCNR lands.The budget for the Department of Health includes $10,000 for

the creation of a registry to monitor the health of residents inareas where shale-gas development is occurring.

Wolf is also proposing to issue $675 million in new bonds tofund energy investments. Among other programs, the bond planincludes $50 million to re-launch the Pennsylvania Sunshinesolar program, $50 million for energy efficiency grants, and $25million to extend natural gas distribution lines to manufacturesand business parks. He projects the debt service on the bondswill be $55 million a year, to be paid from the gas severance tax.

Many are predicting that partisan wrangling over the finalform of the budget will go well beyond the annual June 30 dead-line for putting a new spending plan in place. House Republicansprefer to raise new revenue by dismantling and selling the stateliquor store system before they consider tax hikes. SenateRepublicans want Wolf to reduce future pension payments forgovernment employees, and to make other retirement systemchanges to save money before they look at new taxes, too. Wolf’sbudget does neither. ■

Severance tax: Continued from page 1

budget (see related article) includes $225 from the severance taxto go to local communities to manage the impact of unconven-tional gas development.

Other provisions include exemptions for gas given away free,gas from low-producing wells and wells brought back into pro-duction after not producing marketable volumes of gas.Producers would be barred from deducting the tax from royaltypayments.

Based on statements made during the initial announcement ofthe tax proposal, it would include conventional gas production.

Backing off from initial claims that the severance tax wouldgenerate $1 billion annually, the governor’s budget shows the taxtaking effect January 1, 2016, and bringing in $165.7 million forthe remainder of the 2015-16 fiscal year. For the first full fiscalyear (2016-17), $765.3 million in severance tax revenue is pro-jected, growing to $948.1 million by FY 2019-20.

“This is not a partisan idea. It’s a recognition thatPennsylvanians are right now getting a bad deal. We deserve tobe fairly compensated for the use of our resources,” Wolf said,obviously not understanding that natural gas is privately owned,except under public lands where the state holds subsurfacerights.

“Threat of extortion”Most disturbing was a remark made by Wolf in response to a

reporter’s question early into the governor’s “EducationReinvestment” tour. Asked about working with the industry toaccept a severance tax, the governor responded that “the alterna-tive is not really no tax, the alternative is no drilling, a ban as inthe case of New York.”

PIOGA’s Lou D’Amico said in response to the governor’sremark: “This statement is tantamount to threat of extortionagainst an industry that is responsible for creating and supporting

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hundreds of thousands of jobs in the Commonwealth, that is nowproducing 20 percent of our nation’s natural gas and that is sig-nificantly contributing to our nation’s growing energy independ-ence. Suggesting a potential ban of the very activity being toutedas the source of promised tax revenues does not belong in a taxproposal announcement–unless, of course, the reference to adrilling ban was intended as a warning to our industry.

”We have been through this before, when our industry foughta severance tax proposed several years ago by former GovernorEd Rendell and received undue attention and excessive delaysfrom certain state agencies” D’Amico continued. “Given thereturn of several former Rendell-era leaders to this administra-tion, we are prepared to face similar tactics in the months ahead,but it will not deter us from opposing a tax that will put 250,000jobs at risk or from fighting a moratorium on natural gas drillingin Pennsylvania.”

Aside from Wolf’s proposal, early into the 2015-2016 sessionlegislators had either introduced or announced plans for about adozen different severance tax bills that would tax production atrates ranging from 3.2 percent to 8 percent and direct the result-

ing revenue at budget problems such as education and state pen-sion obligations.

Get involvedPIOGA is working with oil and gas industry groups, the

Pennsylvania Chamber of Business and Industry and other sup-porters to deliver the message to elected officials that a severancetax would be devastating to our industry and harmful toPennsylvania’s economy. We encourage you to reach out to yourstate representative, senator and Governor Wolf to let them knowwhat this tax would mean to you and your business. We also askthat you urge employees, industry colleagues, royalty owners,family and local businesses to do the same.

If you don’t know how to contact your elected officials, visitwww.bipac.net/lookup.asp?g=PIOGA for an easy-to-use lookuptool.

You can also check www.pioga.org for sample letters that youand others can use. These letters should be available by the timeyou read this.

Please take the time to become involved! ■

Members of PIOGA and the Independent PetroleumAssociation of America joined together in Washington,D.C., for the annual Congressional Call-Up on March

2-4 to talk about the challenges and opportunities for the oil andgas industry in America. Fourteen PIOGA members joined over100 oil and gas representatives from across the country in thenation’s capital for our meetings with over 125 congressionalmembers.

The PIOGA group met with 19 congressmen and senatorsfrom Pennsylvania, Maryland, Ohio and New York. Many of thePennsylvania legislators and their staff continue to be knowl-edgeable about the importance of oil and gas development to thenation, but some still need to be educated about the complexitiesof our industry as it relates to tax and capital reinvestments, thebenefits of allowing more exports, and the continued struggle forour industry with overregulation from multiple state and federalagencies. Another key area of discussion was the differencesbetween legacy conventional producers and shale producers, andthe important distinctions between their operations and impacts.

On the federal level, IPAA’s top legislative concerns for the114th Congress are taxes, oversight of administrative actions andjob creation. Our members were able voice their concernsregarding the negative effects that bad tax policy would have onour industry. We explained that access to capital is critical inconstructing a business plan for independents. Higher oil andnatural gas taxes mean less money for capital budgets, whichmeans less drilling and production will take place and fewer jobswill be created. We urged the legislators that we met with to keepthe current provisions in place.

We also discussed the need for more transparency withEndangered Species Act listing decisions, limiting the amount oftaxpayer money spent on litigation, expanding the role for states,and ensuring the ecosystems and the species that occupy themare protected for future generations. We also discussed theimportance of crude oil exports and the market opportunities that

exist to help even out the global market. Lastly, we were able toconvey the importance of independent producers to the work-force, supporting more than 2 million jobs in the United States.

Our industry continues to face significant challenges and mis-perceptions and it was critical for our independent producers toget this face time with members of Congress to discuss thepotential impacts to their businesses and their ability to createjobs, economic prosperity and affordable domestic energy forAmerica. We encourage all PIOGA members to get involved inthis political process and contact your local, state or federal rep-resentatives to keep our issues at the forefront.

PIOGA would like to extend a thank-you to our memberswho attended our annual trip to D.C. to help us talk about theissues: Jim and Shane Kriebel from Kriebel Companies;Gary Slagel and Holly Christie, Steptoe & Johnson; DariaFish, Chief Oil & Gas; Patrick Marty, Anadarko; BurtWaite, Moody & Associates; Kevin Gormly, Vorys, Sater,Seymour and Pease; Tom Bartos, ABARTA Energy; and CarlCarlson, Range Resources. ■

PIOGA and IPAA partner for another successful Congressional Call-Up

From left: Jim Kriebel of the Kriebel Companies, PIOGA’s LouD’Amico and Tom Bartos of ABARTA Energy in D.C.

February 2014 Page 5March 2015 Page 5

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Pennsylvania Supreme Courtdecision makes operatorsbear risk of challengedlease’s expiration

Should an operator in a lawsuit challenging the validity ofits oil and gas lease have to risk having its lease expireduring that suit by not commencing operations? Nearly all

states whose courts have addressed this issue say, “No.” Thosestates’ courts allow operators to extend or “equitably toll” theirchallenged leases if they prevail in the suit. But not inPennsylvania, where the Supreme Court has rejected equitabletolling in most situations and forced the operator to bear the riskthat its lease will expire during the suit challenging that lease.

On February 17, the Pennsylvania Supreme Court issued asignificant opinion in Harrison v. Cabot Oil & Gas Corp. inwhich the court refused to apply equitable tolling principles.Wayne and Mary Harrison filed suit in the United States DistrictCourt for the Middle District of Pennsylvania by asserting adeclaratory judgment claim that they had been fraudulentlyinduced by Cabot to enter into an oil and gas lease. Cabot coun-terclaimed seeking its own declaratory judgment that in the eventthe Harrisons’ claims failed, Cabot was entitled to an extensionof the lease’s primary term under equitable tolling principles forso long as the suit was pending. In fashioning its claim for relief,Cabot suggested that the lease term be extended for the periodcommencing at the end of the litigation for so long as the case

was pending. For instance, if the case took18 months from start to finish, Cabot advo-cated that the lease should extend for anadditional 18 months once the case ended.Cabot justified its request to extend thelease term by arguing that the Harrisons’suit put a cloud on its lease and prevented itfrom prudently taking steps to commenceoperations—which would have tolled thelease’s primary term.

The District Court ultimately grantedCabot’s motion for summaryjudgment, thereby disposing ofall of the Harrisons’ claims. Thetrial court, however, deniedCabot’s counterclaim, holding that Pennsylvania law did not sup-port equitable tolling of a gas lease under these circumstances.The trial court relied on the 1982 case of Derrickheim Companyv. Brown, 451 A.2d 477. In that case, the Superior Court heldthat an operator who suspended operations until a title defect wasresolved was not entitled to equitable tolling. The Superior Courtheld that the operator was not justified in ignoring the lease’sexpress language regarding the lease expiring during a cessationof operations. The trial court believed that the facts of the twocases were significantly similar and that the reasoning ofDerrickheim controlled.

As a result of the District Court’s decision, Cabot appealed tothe United States Court of Appeals for the Third Circuit, whichthen certified the case to the Pennsylvania Supreme Court on thegrounds that there was an issue “of first impression and of signif-

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icant public importance, given that its resolution may affect alarge number of oil and gas leases in Pennsylvania.” Thus, insomewhat unusual circumstances, the case went from a federalappeals court straight to the Pennsylvania Supreme Court for itsdetermination.

In a unanimous decision, the Supreme Court upheld the trialcourt’s decision not to toll the oil and gas lease. In so ruling, thecourt noted that a party acts at its own peril if it refuses to per-form its contractual duties. In this instance, the court held inessence that Cabot should not have risked expiration of the leaseby failing to commence operations. The court also noted thatfinding for Cabot would require the adoption of a “specialapproach to repudiation pertaining to oil and gas leases,” whichit declined to do. The court acknowledged, but ultimately choseto ignore that nearly every other state addressing this issueadopted the equitable tolling rule Cabot advocated. Those otherstates which have adopted the rule Cabot argued for includeLouisiana, Arkansas, Illinois, Texas and Montana.

The Supreme Court explained that the Harrisons’ attempt toinvalidate the lease did not justify “altering material provisions”of the lease—i.e. the primary term. The court noted as an alter-native approach operators are free to negotiate tolling agreementsin their leases, particularly since lease challenges are so preva-lent. The court also noted that the result of the case may havebeen different “where there is an affirmative repudiation of thelease.” In other words, had the lessors prevented the operatorfrom entering the leasehold property to conduct operations, thecourt may have been willing to toll the primary term of the lease.

The Harrison case is significant in several respects and its les-sons should not be ignored. First, the case opens the door for

lessors to try to “run out the clock” on leases by filing frivolouslease litigation. Although operators might have claims againstlessors for bringing frivolous suits, it may tip the scales forlessors in deciding whether to pursue litigation that may “be aclose call” where a lease is at risk for expiring during the suit.Secondly, the case clearly imposes on operators both the obliga-tion and the risk to continue operations even in the face of suitschallenging the validity of their leases. That risk is obviouslygreat where the operator faces the potential ruling that its lease isinvalid. Third, if a lessor files suit to challenge a lease’s validityand simultaneously denies the operator the right to conduct oper-ations, the operator must now consider filing for equitable reliefthrough an injunction before seeking to toll the lease term. Inother words, believe it or not, an operator whose lease is beingchallenged may be in a better position to extend the term of itslease if it is being prevented from operating by the lessor. Lastly,and most importantly, the Harrison case makes clear that allfuture leases entered into in Pennsylvania contain tolling provi-sions to extend the primary terms of those leases in the event of avalidity challenge by the lessor.If you would like additional information about this importantdevelopment, contact the author at 412-253-8818 or ssilver-man@babstcalland.com. ■

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Energy andNatural Resources

February 2014 Page 9March 2015 Page 9

There’s no doubt about it: Our members and our industryare facing difficult times due to low product prices.Nevertheless, we were very pleased with the turnout for

our February 24-25 Winter Meeting at Seven Springs.Things started off with sporting clays on Monday the 23rd,

and about three-dozen hardy souls showed up to shoot on a daywith single-digit temperatures but brilliant sunshine and cloud-less blue skies. On Tuesday and Wednesday, well over 200 mem-bers and guests participated in the conference sessions, dinnerand the ever-popular Monte Carlo Night.

Conference reportThe theme of the conference was “Clouds on the Horizon,”

and many of the conference presentations dealt not only withapproaching challenges but also issues confronting the industryright now. Opening the conference, PIOGA President &Executive Director Lou D’Amico thanked the members who takethe initiative to participate in the association’s activities, whetherthrough involvement in committees or supporting events such asthe Winter Meeting.

Kevin Moody, PIOGA vice president & general counsel, pro-vided an overview of important legal activity and then led apanel discussion on local ordinances with Kevin Garber andBlaine Lucas of Babst Calland and Lisa McManus ofPennsylvania General Energy. They discussed a pending federallawsuit against a “community bill of rights” ordinance in GrantTownship, Indiana County, that is preventing PGE from operat-ing a legally permitted injection well and forcing the company tobear the expense of trucking wastewater out of state. The consen-sus was that industry will prevail in this and other challenges tosimilar ordinances. Looking at trends in local regulation, Lucassaid the tendency is toward placing geographic rather than envi-ronmental constraints on industry—limiting compressor stationsto industrial zones, conditional-use requirements that hold upprojects and increased setbacks that greatly limit where develop-ment may occur.

Next up was D’Amico, delivering an impassioned sermon on

the evils of a sev-erance tax andthe need forthose in theindustry andthose who sup-port the industryto start tellingtheir story to theGeneralAssembly andthe public (seepage 1).

“I hope youdon’t just standon the sidelines,”he cautioned.“This issue is just too important to all of us.”

Ron Cusano of Schnader Harrison Segal & Lewis, along withRoy Rakiewicz and Meghan Barber of ALL4, Inc., ran throughseveral federal and state emissions issues. Among them werefinal amendments to the U.S. Environmental Protection Agency’sSubpart OOOO New Source Performance Standards affectingemissions from well completions, production, storage vesselsand other sources; the Obama administration’s recentlyannounced strategy for reducing methane emissions, an effortPIOGA is attempting to become involved in as a representativeof small businesses; aggregation of emissions sources for NewSource Review permitting (see the related article in this issue);and modifications by the state Department of EnvironmentalProtection to its General Plan Approval/General OperatingPermit, known as GP-5.

PIOGA Environmental Committee co-chairs Paul Hart ofFluid Recovery Services and Ken Fleeman of ABARTA Energyteamed up with the association’s regulatory consultant ScottRoberts to provide a rundown of the many topics under the com-mittee’s radar. For example, Roberts explained that as a result of

Winter Meetingin review

Top: Lou D’Amico urges members of theindustry to actively oppose a severance tax.Above: Enjoying Monte Carlo Night.

Page 10 The PIOGA Press

sue-and-settle legal tactics by environmental activists, the U.S.Fish & Wildlife Service is expanding its efforts regarding threat-ened and endangered species to include restrictions on “criticalhabitat”—areas where a species doesn’t necessarily exist, butcould. Currently, PIOGA is work-ing to counter a listing by theagency of the northern long-earedbat which could affect the indus-try’s operations.

Dan Weaver, PIOGA director ofpublic outreach, and Dave Mashekof Meinert/MashekCommunications offered perspec-tive on how opponents of naturalgas development have changed tac-tics over the past several years. In asession that generated a goodamount of dialogue among confer-ence participants, Mashek empha-sized: “We need voices out there across the Commonwealth, sup-porting our industry.” He advised those in the industry to utilizetheir employees and their families to help counter the negativemessage of the “professional protesters” and tell how the indus-try is benefitting local communities. Weaver provided an updateon PIOGA’s energy education project, which is using a teach-the-teachers approach to create a generation of energy-aware citi-zens.

Dick Gmerek of Gmerek Government Relations kicked off theWednesday sessions with an insider’s view of what’s happeningin Harrisburg as a new Democratic administration begins buttingup against the staunchly conservative leadership setting the agen-da for the GOP-controlled legislature. A natural gas severancetax, he predicted, may become the litmus test for whether theRepublican leadership is able to achieve its goal of finding waysof dealing with a massive budget deficit that don’t involve rais-ing taxes. Anticipating a protracted budget process, rancorousconfirmation hearings in the Senate for Governor Wolf’s choiceto head DEP and a deluge of industry-related legislation, Gmerekopined: “It’s going to be a long year.”

Legislative and regulatory activities in Washington wereaddressed by Samantha McDonald of the Independent PetroleumAssociation of America (IPAA). She touched on many of thesame federal issues of concern to PIOGA—such as the Obamaadministration’s new methane-reduction strategy and endangeredspecies designations—and also explained that a major emphasisof the IPAA involves clearing the way for crude oil exports andincreasing exports of liquefied natural gas.

Some of the event’s most positive news came during a sessionon the benefits of the natural gas impact fee. Due to unforeseencircumstances, the scheduled county commissioner panelistswere unable to attend; however, one sent a written statement thatwas read aloud at the meeting and the other participated via con-ference call.

In his written statement, Doug McLinko, chairman of theBradford County Board of Commissioners, recounted the pros-perity natural gas development brought to his county and said heoriginally did not support the Act 13 impact fee because “we didnot want to make a decision that would hurt the industry that hadalready done so much for us.” However, after much considera-tion, the county decided to opt in to the impact fee program, and

the result has been very beneficial. The Act 13 money hasallowed the county to implement several new programs, includ-ing the Bradford County Infrastructure Bank that provides low-interest loan financing to support infrastructure projects county-wide.

McLinko stated that he strongly opposes efforts to impose aseverance tax, which he would be “incredibly irresponsible” andwould harm not only the industry but also the communities ofBradford County.

Speaking by phone, Washington County Commissioner DianaIrey Vaughan agreed that the impact fee has been very good forlocal governments within her county, allowing officials to reha-bilitate bridges, update emergency response capabilities and tosoon construct a new public safety facility. “It’s impossible tooverstate the importance of the funds,” she said. The commis-sioner also described drilling that has occurred on county-ownedproperty, noting that it has been a tremendous success with littlenuisance.

Joe Baran of Bertison-George provided detailed statistics onhow the impact fee revenue has been distributed, emphasizingthat the entire state—even areas where no unconventional gasdevelopment has occurred—is benefitting. The message of thewidespread effect of the impact fee isn’t getting out, he said.Baran analyzed taxes and activity surrounding states, arguing

that drilling has been suppressedby a severance tax in WestVirginia—the state which GovernorWolf says is the model for his pro-posed tax. Baran also took issuewith Wolf’s contention that a sever-ance tax in Pennsylvania wouldgenerate $1 billion annually.

RJR Safety’s Wayne Vanderhoofwrapped up the conference pro-gramming with a presentation onsafety issues surrounding conden-sate, the highly flammable naturalgas liquids found in the “wet” gastypical of southwest Pennsylvania.

He advised producers and service providers to identify wherecondensate-related hazards exist in their operations, engineer outas much of the risk as possible, establish safety procedures forworkers and provide employees with appropriate personal pro-tective equipment.

Something newA new feature to PIOGA’s major events was unveiled at Seven

Springs—the Product and Services Showcase. It’s an opportunityfor our service and supplier members to make presentationshighlighting their products to attendees. Offering Showcase pre-sentations were AM Health and Safety, Community Bank, FortisEnergy Services, Guttman Energy, MHF Services, PICAppalachia, Profire Energy and Tensar International. We willcontinue to tweak this concept, but from reports we’ve receivedthe Showcase sessions were well-received.

Thanks to our attendees, speakers and sponsors for makingPIOGA’s 2015 Winter Meeting a success. We greatly appreciateyour support.

Next up on our schedule is the June 1 Summer Picnic andGolf Outing at Wanango Golf Club in Reno. ■

Ken Fleeman discussingenvironmental issues.

Joe Baran talks about theimpact fee.

February 2014 Page 11March 2015 Page 11

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The U.S. District Court for the Middle District ofPennsylvania relied on the plain meaning of the word“adjacent” in a case challenging whether a producer’s

compressor stations should be grouped together for the purposeof more stringent emissions permitting. Taking on the issue ofaggregation in Citizens for Pennsylvania’s Future v. UltraResources, Inc., U.S. District Judge Robert D. Mariani ruled thatUltra Resources’ eight compressor stations in Potter and Tiogacounties did not constitute a major emitting source of nitrogenoxide (NOx) under the federal Clean Air Act or Pennsylvania’sNew Source Review (NSR) rules and that the Department ofEnvironmental Protection had properly permitted the facilities.

Any facility that emits—or has the potential to emit—100tons per year (TPY) of a pollutant must be classified as a majoremitting source and is subject to a tougher permitting processthan facilities that fall below the 100 TPY threshold. While thecompressor stations at issue individually emit far below the 100TPY threshold for NOx, in the aggregate they have the potentialto exceed the threshold.

Citizens for Pennsylvania’s Future, the environmental advoca-cy group more commonly known as PennFuture, filed suit in2011, arguing that Ultra violated NSR requirements by con-structing a major NOx source without the proper permit. Ultraobtained separate DEP authorizations to use the General PlanApproval/General Operating Permit known as GP-5 for each ofthe compressor facilities. PennFuture contended that the stationsare functionally interrelated—even though the compressors arenot connected by a common pipeline, they all feed into the samemetering station—and should be considered a single facility withthe potential to emit in excess of the 100 TPY threshold.

Aggregation requires meeting a three-pronged test: Whetherthe pollution sources are within the same industry, whether thefacilities are located on one or more adjacent or contiguous prop-erties and whether they are under control of the same entity. Thefederal Environmental Protection Agency has interpreted adja-cent or contiguous property to include an analysis of “interde-

pendence.”The defini-

tions of “adja-cent” and “inter-dependent” areopen to interpre-tation, however,and Pennsylvaniahas not alwaysagreed with thefederal agency onwhat they mean.The EPA prefersa functional inter-relationship testin making single-source determina-tions, but in 2012the U.S. Court ofAppeals for theSixth Circuit

ruled in Summit Petroleum Corp. v. U.S. EPA ruled against theEPA’s approach.

In the case involving Ultra Resources, Judge Mariani agreedwith the Sixth Circuit that “the plain meaning of ‘contiguous’and ‘adjacent’ should control a determination of whether two ormore facilities should be aggregated.”

“Because a number of separate and unconnected parcels ofland on which the compressors are located would have to beaggregated in order for the [NOx] emissions to reach the level ofa ‘major’ source, and some of these properties are separated byseveral miles, the properties at issue cannot reasonably be con-sidered…to be ‘adjacent,’ ” Mariani wrote in his decision. Thecompressor stations are located several miles from one another,and DEP generally considers facilities adjacent when within aquarter-mile of each other.

The District Court judge found that the compressor stationsalso are not interdependent, even though all deliver gas to thesame receipt point. Mariani wrote that DEP should considerinterdependency on a case-by-case basis.

“Despite this court’s finding that the plain meaning of ‘con-tiguous’ and ‘adjacent’ should control a determination of whethertwo or more facilities should be aggregated, we decline to holdthat functional interrelatedness can never lead to, or contributeto, a finding of contiguousness or adjacency,” he stated, addingthat the court “recognizes the risk that a strict application of theplain meaning of the terms ‘adjacent’ and ‘contiguous’ mayallow oil and gas exploration and production companies tomanipulate or structure their wells and compressors in such atechnical way as to avoid being deemed a “major” source,including by avoiding the aggregation of their wells and com-pressors.”

In addition to being a significant loss for PennFuture, the rul-ing could have implications beyond Pennsylvania. Since the2012 Summit Petroleum ruling, the EPA has taken the positionthat the more commonsense application of aggregation appliesonly to emitters within the area covered by the Sixth Circuit—essentially Kentucky, Michigan, Ohio and Tennessee. This latestruling may help to change that.

PIOGA member Babst Calland defended Ultra Petroleum inthe case. ■

One perspective on PennFuture’s case:“It’s as if a Wal-Mart store were to be required to secure abuilding permit for constructing 1.82 million square feet of floorarea because it happened to be building 10 supercenters of182,000 square feet each in 10 nearby communities. Commonsense quickly tells us how absurd that would be. Nonetheless,that’s exactly what PennFuture was asserting in this case; that,because the facilities were part of the same distribution sys-tem, they should be considered a unit for permitting purposes,even though they are miles apart (this case involved a roughly30 square mile area of Potter and Tioga counties on whichwere proposed eight compressor stations or about one perfour square miles).”

—Tom Shepstone, writing in the Natural Gas NOW blog

Federal judge rules in favor of common sense in PA aggregation case

February 2014 Page 13March 2015 Page 13

Page 14 The PIOGA Press

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DEP reformulates TAB,announces new conventionalproducers’ advisory group

As the Department of Environmental Protection is poisedto release a second formal draft of its Chapter 78 rule-making, the Wolf administration decided to appoint a

new slate members to DEP’s Oil and Gas Technical AdvisoryBoard (TAB) and announced the creation of a separate commit-tee to offer input on rules affecting the conventional industry.

TAB was created under the Oil & Gas Act of 1984 (and reau-thorized under Act 13 of 2012) to consult with DEP in the devel-opment of oil and gas regulations of a technical nature. Theboard reviews and comments on draft regulations before they areformally presented to the Environmental Quality Board to startthe rulemaking process. TAB’s five members are appointed bythe governor and must include three individuals who are a petro-leum engineer, a petroleum geologist or an experienced drillingrepresentative of the oil and gas industry; one experienced min-ing engineer from the coal industry; and one geologist or petrole-um engineer chosen from among three names submitted by theCitizens Advisory Council.

The Wolf administration wanted to make its own mark onTAB, calling for new members on the panel. The five membershad served between seven and 26 years, and had included threePIOGA directors—Gary Slagel, Burt Waite and Sam Fragale.

At least one of those individuals wasn’t contacted to tell himhis service was no longer needed. Waite told the Pittsburgh Post-Gazette: “The official word is that they are reinvigorating [thetechnical advisory board] with all new membership. If thedepartment was dissatisfied with the volunteer work that I wasdoing, or the other members were doing, I don’t know.”

At the Citizens Advisory Council’s February 17 meeting, DEPindicated TAB was being refocused to advise the agency onunconventional oil and gas regulations and policy. On the sameday, DEP formally announced it was creating the ConventionalOil and Gas Advisory Committee (COGAC). The new committeewill advise DEP about matters related to conventional oil and gasextraction practices and regulations and will be structured simi-larly to TAB. A DEP news release said COGAC will “increasetransparency and communication about regulating the conven-tional oil and gas drilling industry.”

“Creating this advisory committee will increase dialoguebetween DEP and the regulated community as well as broadenthe interests we hear from,” Acting DEP Secretary John Quigleysaid. “Improving communication between all stake holders andour department will foster stronger environmental safeguards inthe future.”

The Citizens Advisory Council provided three names to beconsidered for TAB, per the requirements of the Oil & Gas Act,and also offered three recommendations for COGAC. Bothgroups will have to be populated by the time TAB meets onMarch 20 and COGAC holds its first meeting on the 26th.

DEP intends present revised drafts of the Chapter 78,Subchapter C regulations governing surface operations at theMarch meetings. Apparently, TAB will be reviewing the portionsthat apply to unconventional operations and COGAC will consid-er the version dealing with conventional oil and gas operations.

Page 16 The PIOGA Press

As part of the state budget package for the current fiscal year,lawmakers directed DEP to split its oil and gas regulations intoconventional and unconventional sections.

The timing of the change in the makeup of TAB is “terrible,”in that “we’re right in the middle of this regulatory process,”Waite told the Post-Gazette. DEP began working on changes tothe Chapter 78 regulations in 2012, and the regulatory process ismandated to be completed by 2016—a timetable that will requirethe rulemaking to continue on a fast track.Another conventional producers’ council?

As DEP was rejiggering its oil and gas advisors, the GeneralAssembly was advancing legislation to create the PennsylvaniaGrade Crude Development Advisory Council. Senate Bill 279unanimously passed the Senate on February 18.

Sponsored by Senator Scott Hutchinson (R-Venango County),SB 279 establishes a 17-member panel to:

• Examine and make recommendations on existing regulationsthat impact the conventional oil and gas industry.

• Explore the development of a regulatory scheme that pro-vides for environmental oversight and enforcement specificallyapplicable to the conventional industry.

• Promote the long-term viability of the conventional industry.• Assist with and comment on new DEP policies impacting

conventional producers.• Review and comment on all proposed DEP technical regula-

tions under the Oil & Gas Act.• Facilitate cooperation and communication in support of the

conventional industry among government agencies and the aca-demic and research community.

• Make recommendations on the promotion and development

of the conventional industry in Pennsylvania.• Develop a plan to increase the production of Pennsylvania

Grade crude oil in an environmentally responsible way to moreadequately supply the refineries that depend on Penn Gradecrude.

• Develop a working group with DEP to explore and developan environmentally responsible and economically viable methodof managing produced water.

Two of the council’s members would be named by PIOGA,and the association strongly supports the legislation.

A companion bill has been introduced in the House ofRepresentatives as HB 600, sponsored by Representative KathyRapp (R-Warren County). Legislation creating the council hadreceived wide support among lawmakers last session, but timeran out before the proposal could find its way to the governor’sdesk.

“The council created under this bill would work to promotethe conventional gas and oil industry and protect it from regula-tions intended solely for the Marcellus Shale gas extractionindustry,” said Hutchinson. “The panel would work with the DEPto ensure that the differences between the operations are takeninto account as these regulations and laws are developed andimplemented.”

DEP’s announcement of its own conventional oil and gasadvisory panel came the same day that SB 279 received theunanimous approval of the Senate Environmental Resource andEnergy Committee, and Hutchinson said he was pleased that thedepartment recognizes the need for the conventional industry’sinput.

“I am pleased to see the DEP is now moving in a similardirection as I propose in Senate Bill 279, but I still believe it isimportant that we codify this initiative in law,” SenatorHutchinson said. “One significant difference is the Penn GradeCrude Development Advisory Council is intended to promote theconventional oil and gas industry in the Commonwealth…. Thisindustry is an important part of the regional economy. It shouldbe supported by the state, not stymied by excessive and unneces-sary regulatory burdens.” ■

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Meet your newest PIOGA board memberRich Adams, Chief Oil & Gas

Rich Adams had a distinguished 35-year career at theNorthcentral Regional office of the PennsylvaniaDepartment of Environmental Protection in Williamsport.

Throughout his ca reer, he specialized in water quality and water-shed protection, providing program management for environmen-tal permitting and projects including industrial and minedrainage treatment plants, and stream and wetland restoration.He was also instrumental in developing DEP’s policies and mod-eling protocols for the special protection programs on high quali-ty / exceptional value watersheds. In his last two years with DEP,he was tasked with managing the water resource elements ofMarcellus Shale development.

After retiring from state government in 2008, he consultedwith the Susquehanna River Basin Commission on projects relat-ing to water usage and Marcellus development. In 2009, Adamswas hired by Chief Oil & Gas as a senior regulatory advisor forwater resources. Over the past five years, he has held positions ofincreasing responsibility and is currently Director of EHSPrograms. His team of nine Chief employees includes environ-mental specialists, engineers, and health and safety coordinators.

He has been a member of the Northcentral PennsylvaniaConservancy and is an active member of PIOGA, serving on theEnvironmental Committee and now on the Board of Directors.Professional achievements include the DEP Secretary’s Awardfor Excellence and the Governor’s Award for Excellence, as wellas being a certified professional engineer.

As a PIOGA board member Adams hopes to help facilitatecommunication and provide additional coordination with DEP.

He would also like tohighlight industry stan-dards for environmentaldiligence and showcasethe successes that haveresulted in industry inno-vations and best manage-ment practices.

“I like to think ofmyself as a practical envi-ronmentalist,” he says. “Ilook for solutions to servethe industry, and at DEP Ienjoyed providing compli-ance assistance and train-ing to communities and

companies. We all need clean air, clean water, sustainable landpractices and we all need energy. We must protect the environ-ment while we are producing energy needed for our country—toheat our homes, to produce and transport the variety of manufac-tured goods we use every day, and to strive towards energy inde-pendence. ”

Adams, originally from Aliquippa, holds a bachelor of sciencedegree in chemical engineering from Bucknell University and amaster’s in chemical engineering with a minor in environmentalstudies from Clarkson University. He enjoys the outdoors, espe-cially fishing and golfing. He resides in Williamsport and hasbeen married to his wife, Sandy, for 35 years. Together they havetwo children, Cynthia Adams, MD, a pediatrician at Boston’sChildren’s Hospital and Richard Adams, EIT, a civil and environ-mental engineer in New York. ■

February 2014 Page 19March 2015 Page 19

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FAA proposes regulations thatwould allow use of drones in oiland gas operations, but do theygo far enough?

Through recent advances in technology, unmanned aircraftsystems (UAS) are easier to operate and capable of per-forming many functions in various commercial sectors. In

light of these capabilities, a variety of commercial entities,including those in the oil and gas sector, have recently soughtapproval from the Federal Aviation Administration (FAA) to usethese devices as part of their commercial operations.

The FAA’s current policy is that no one may use UAS inactivities related to a commercial purpose, unless specificallyauthorized by the agency. However, the FAA issued a notice ofproposed rulemaking on February 23 setting forth its long-await-ed proposal for how to begin allowing the use of unmanned air-craft by businesses without case-by-case approvals from theagency. (See 80 Fed. Reg. 9544, Feb. 23, 2015.) Although theregulations are a step in the right direction, some limitations mayprove insufficient for certain stakeholders in the oil and gaspatches in Pennsylvania and across the country that seek to max-imize the use of these devices as part of day-to-day operations.

BackgroundUAS, as they are referred to by the FAA, are also known as

remotely piloted aircraft (RPA) or unmanned aerial vehicles

(UAV). In the mainstream news and popularculture, these devices are often referred toas “drones.” They are aircraft—usuallysmall planes or helicopters—that do nothave an on-board pilot, but are instead oper-ated remotely. These devices can range fromvery small (less than 5 pounds) to very large(e.g., UAS used in military operations), andoperate at different speeds and altitudes.They can be equipped with cameras, videotransmission devices and a variety of sensorpackages that can perform, for instance, air,biological, chemical or radioactive sam-pling, or geophysical surveying.

The use of drones in oil and gasoperations

The demand by oil and gas companiesfor using unmanned aircraft continues torise. Potential industry uses include pipelineand right-of-way monitoring/investigation,project siting and surveying, environmentalmonitoring through video feed orchemical sensors, and drill-site inspec-tion. If necessary, unmanned aircraftcan also help provide situational aware-ness for first responders.

In fact, the first two commercial unmanned aircraft operationsapproved by the FAA were used for surveying and pipeline mon-itoring related to oil drilling operations in Alaska. In addition,

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the FAA has granted authority to two other companies in the oiland gas industry to perform flare stack monitoring and aerialmonitoring of operations for safety purposes. Several otherrequests for specific authorization within the oil and gas industryare pending.

Proposed regulationsAs noted above, the use of drones is prohibited unless the

FAA grants an exception under Section 333 of the Modernizationand Reform Act of 2012 to authorize the use of UAS for com-mercial purposes. Specific authority to use unmanned aircraft forcommercial purposes under Section 333 has, to date, been grant-ed to fewer than 40 companies across the country.

In response to the increasing demand for the ability to useUAS in commercial operations, the FAA has proposed regula-tions that would authorize the widespread use of UAS weighing55 pounds or less without requiring specific approval from theFAA. There are some notable, safety-based limitations on the useof unmanned aircraft under the FAA’s proposal: operationswould be restricted to daylight, within the operator’s visual lineof sight and to a maximum altitude of 500 feet. While flightsnear structures are permitted, flights over people generally arenot. The FAA will also require unmanned aircraft operators topass an aeronautical knowledge test and obtain a UAS license.Owners of unmanned aircraft must register their device with theFAA.

The upside and a potential downsideOverall, the proposed rules are generally beneficial to oil and

gas companies, which would be able to use unmanned aircraft in

day-to-day operations without specific permission from the FAA.As currently proposed, the rules would allow for efficient aerialsurveying and mapping of project sites, providing companieswith useful planning and safety information that may not other-wise be available. Given the rapid pace of innovation in the UASfield, the future should provide even more advances for compa-nies to utilize.

One limitation imposed by the FAA that will likely have asignificant effect on some potential oil and gas-related operationsis the requirement that flights must take place within the opera-tor’s visual line of sight. For some operations, particularlypipeline or right-of-way monitoring, this limitation may be cru-cial. These operations would typically entail programming anunmanned aircraft to fly a pre-set route, or using a streamingvideo feed so the operator could guide the aircraft from a remotelocation. The utility of these operations diminishes, if not com-pletely disappears, when an operator must remain within sight ofthe aircraft. The agency’s proposal in this regard may fall shortby not providing flexibility where a company can show that itsoperations outside the line of sight would be just as safe as oper-ations with the operator present.

ConclusionIn sum, the overall reaction to the FAA’s proposed rules is

tempered optimism. The agency’s proposal would certainly behelpful to many oil and gas companies interested in using thistechnology.

Unfortunately, the restrictions suggested by the FAA maylimit the extent of UAS usage within the industry unless changesare made and the FAA takes a more flexible approach in deter-

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mining which unmanned aircraft operations are safe. In addition, oil and gas companies should understand that the

rulemaking process may take a long time to complete. Until theFAA’s rules are finalized—a process some expect to take two ormore years—receiving specific authority from the FAA contin-ues to be the only way for companies to use unmanned aircraftunder current FAA guidelines. Stakeholders wishing to utilizeUAS in their operations may wish to consider engaging counselto apply for specific approvals from the FAA in the interim.

Finally, the agency is requesting comments on the issuesinvolved with the proposed rule, and companies interested inusing these devices should strongly consider letting the FAAknow how the proposed rules could be improved.

Given the expected time frame of more than two years untilimplementation, oil and gas companies with an immediate inter-est in deploying UAS applications within the proposed rule’slimitations might also consider comments to the agency urgingthe quick adoption of the rules, even provisionally—especiallysince the proposed rules are not terribly complex or controver-sial. Industry stakeholders would be well served to considerengaging the FAA in the regulatory process and offering com-ments on the proposed regulations. ■

Martin L. Stern, Edward J. Fishman and James B. Insco II alsocontributed to this article as part of K&L Gates’ unmanned air-craft team.

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Smoothing pipeline kinksBy Adrianne Vigueras, Vice PresidentECBM Brokerage

Pipelines are the arteries of the natural gas industry. Thenecessity to move product efficiently is paramount to aprofitable industry. Having said that, pipeline debates have

begun among residents as well as environmentalists acrossPennsylvania as to the pros and cons of a pipeline in “my back-yard.”

All of these debates are in the court of public opinion, andpipeline companies need tools to address the concerns of the res-idents whose land is being utilized. Insurance has sometimesbeen used to quell the fear of residents that in the event of a leakthe pipeline company will not be able to make reparation.

A general liability policy will cover the pipeline company forthird-party suits for bodily injury and property damage. Such apolicy can address claims that involve illness blamed on leakage,including livestock becoming sick and or dying from exposure toleaks and damage to the lessor’s property. All of these claims arethird-party only and do not cover the pipeline company for dam-age to its pipe. This does, however give the company some credi-bility toward having a good business ethic and taking responsi-bility for any accidents. This helps in the court of public opinion.

To protect the pipeline company from the financial burden ofrepair or replacement of a portion of pipe, the operator couldpurchase a “pipeline warranty policy.” This would cover the costas a result of wear and tear or damage to the pipe from an out-side source. Only pipelines that are less than three years old andcarry gas, steam or water can purchase this type of policy. The

policy can also include environmental risks as well as businessinterruption for clients if limited to one or two. In this way, thepipeline company can more easily project financial risk.Residents along the pipeline will be more comfortable with thefact that if there is a breach the company will be able to pay forthe quick repair. They do not have to worry about a pipelinecompany not having the assets to respond quickly.

By smoothing out these kinks, pipelines will have a bit easiertime convincing residents to allow them to go through their prop-erty. It will also allow them to better project financial risk.

For more information on this subject contact the author at610-664-8299 ext. 1335. ■

Page 26 The PIOGA Press

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Death and taxesTaxing the oil and gas industry inPennsylvania and elsewhereBy David PalmertonGZA GeoEnvironmental, Inc.

The quote, “Nothing can be said to be certain except fordeath and taxes,” is commonly attributed to BenjaminFranklin writing in 1789 about our new constitution. Just

a few years after Franklin’s quote, it was protesters in WesternPennsylvania who rebelled against an excise tax on whiskey(Whiskey Rebellion, 1794); this is the same state that seeks totax oil and gas production 221 years later.

Although death may be peeking over the horizon for some oil and gas producers in Pennsylvania, taxes certainly are for most.

Thirty-three states produced oil or gas in 2014. The top fivenatural gas producers were Texas, Pennsylvania, Louisiana,Oklahoma and Wyoming. The top five oil producers were Texas,North Dakota, California, Alaska, and Oklahoma (EnergyInformation Agency, 2015).

Taxes and feesThirty-five states have enacted taxes or fees on oil and gas

production and three of these states have taxes on oil and gaseven though they don’t have any production (North Carolina,Idaho and Wisconsin).

Maryland, New York and Pennsylvania are the only oil andgas producers without a severance tax. However, Pennsylvania

has an “impact fee” on every well drilled for gas in theMarcellus Shale formation and New York has a real property taxwhich allows for ad valorem taxes on the value of natural gasproduced. In both of these cases, the revenue goes back to thelocal community to support schools, fire departments and otherservices. As of late 2014, the Maryland legislature was consider-ing both fees and severance taxes on natural gas produced fromthe Marcellus Shale.

PennsylvaniaPennsylvania’s new governor, Thomas Wolf, is on record for a

natural gas severance tax. Even as the downturn in the oil andgas industry hit the Commonwealth, he was quoted as saying “Iwant that industry to see a tax.” (Editor’s note: See this issue’spage 1 article about Wolf’s proposed tax.)

New York has effectively eliminated the tax problem by shut-ting down the industry via politically motivated bureaucraticstudies. Several years ago, just as Marcellus Shale developmentwas taking off in Pennsylvania and no development had begun inNew York, several New York legislators were calling for a tax onnatural gas production even though it hadn’t started—a sure wayto turn away potential operators and significant revenue that tax-payers would have appreciated.

Finding and producing natural gas and oil is an expensiveventure. Natural resources don’t enter commerce at no cost. Eachoperating company has capital costs, operating costs (fixed O&M

Commentary

February 2014 Page 27March 2015 Page 27

and variable O&M), and other costs such as royalties tolandowners, royalties to other owners, depletion, depre-ciation and taxes.

The use of revenue generated by severance taxes (orfees) varies by state, but most states deposit at leastsome portion of the revenue in the general fund. Asmentioned, states such Pennsylvania contribute a largeportion of the revenue collected to local counties ormunicipalities, typically according the need (e.g.municipalities affected by drilling and production oper-ations). In other states, the taxes or fees go to the gen-eral fund, often not offsetting any local oil and gaseffects.

Some argue that severance taxes will limit produc-tion or cause operators to seek more favorable states fordevelopment. There may be some truth to this forsome, but generally operators are not going to pick upand leave unless the burden is much greater than inother states. However, the tax burden is especially criti-cal when the cost to produce nears the sale price andthe margin is small. Of the 375 conventional oil andgas operators here in Pennsylvania, about 350 can beclassified as small to medium size and 245 of them are produc-ing from fewer than 50 wells, mostly oil. About 165 are produc-ing from fewer than 10 wells—family-owned mom and pop typeoperations. Only 14 conventional gas wells were drilled inPennsylvania in 2014.

Designed to identify states, provinces and other geographicregions that have the greatest barriers to investment in oil andgas exploration and production, the Fraser Institute’s 2014

Global Petroleum Survey provides independent evidence as tohow particular jurisdictions compare and where oil and gas com-panies are likely to not invest.

Fraser’s 2014 survey shows that Pennsylvania dropped oneplace from 17 to 18, with Oklahoma being the most attractiveU.S. jurisdiction at number one. Moving closer to New York andthe bottom of the list is not a positive for Pennsylvania’s econo-my.

Source: www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/global-petroleum-survey-2014.pdf

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According to Pennsylvania’s Independent Fiscal Office,Pennsylvania has the lowest total effective tax rate (includingstate severance and certain local taxes) among the comparisonstates.

So far, the Pennsylvania impact fee has brought in $630 mil-lion ($204 million in 2011, $202 million during 2012 and $224million in 2013). The Public Utility Commission expects more

than $200 million moreto be collected for 2014.

This is in addition tothe $34.7 billion the oiland gas industry has con-tributed to Pennsylvania’seconomy (according to anAmerican PetroleumInstitute study) and the$2 billion in state taxes(according to the stateDepartment of Revenue).

Greenpeace has saidthat the oil and gas sup-porters have an agenda to“Cut taxes to starve andshrink government, tokeep it ineffective.” It’sdifficult to see how tak-ing billions of dollars outof the economy would bea positive for governmentor the people of the state.

The Pennsylvania Budget and Policy Center says a severancetax on natural gas, which every other major gas-producing statealready has in place, will generate significantly more revenue forPennsylvania than the current impact fee, even at lower gasprices (biz570.com/energy/pbpc-severance-tax-will-bring-in-many-times-the-revenue-of-impact-fee-1.1810476).

According to a May 2014 policy memo by Elizabeth Stelle ofthe Commonwealth Foundation:

A severance tax doesn’t solve the problems of run-away welfare costs, which are growing faster thanstate revenue, or our $50 billion pension liabilitywhich would require an additional $3 billion in pay-ments each year for the next 30 years. Pennsylvaniaalready maintains the 10th highest state and localtax burden, which hurts our ability to compete. Iflawmakers do not address these cost drivers, a sever-ance tax will be just one of many tax hikes necessaryto prop up spending as the state’s economy languish-es.Another danger of a severance tax is divorcing therevenue from local impacts, creating a slush fundfor unrelated programs [emphasis added]. Theimpact fee requires 60 percent of the revenue to stayin the local communities facing impacts fromresource extraction. Transitioning to a severance taxremoves the very rationale for the impact fee: toallow local governments to deal with costs related tothe impact of drilling. (Source: www.commonwealthfoundation.org/research/detail/dangers-of-a-severance-tax)

The Pennsylvania oil and gas industry isn’t dead yet, but asthe industry slows and the economics become less favorable,taxes can only hurt, possibly bringing the industry that muchcloser to the certainty of death and taxes. ■

Serving the Oil & Gas Industry for over 90 years.

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Austintown, OH 330-799-1100 Bradford, PA 814-368-8145 Buckhannon, WV 304-472-3565 Carrollton, OH 330-627-0259 Columbus, OH 614-475-4033 Corbin, KY 606-523-9640 Horseheads, NY 607-739-8575 Hurricane, WV 304-562-5724 Indiana, PA 724-349-6823 Williamsport, PA 570-748-5276 Norton, VA 276-679-6452 Wooster, OH 330-264-0077

Source: www.ifo.state.pa.us/download.cfm?file=/resources/PDF/SR2014-02.pdf

March 2015 Page 29

Safety Committee CornerSafety Committee CornerSafeLand USA – AWARE RigPass program is fully accreditedas SafeLand USABy Wayne Vanderhoof, CSPand Jackie Barkus, ASHM

RJR Safety Inc.

SafeLand USA is a curriculum of 24 specific topics that arerequired to be included in training for accreditation as aSafeLand USA program. The accreditation can be through

any one of the three accrediting bodies—the InternationalAssociation of Drilling Contractors (IADC), PEC or EnergyTraining Council (ETC).

Though there are minor differences in the accrediting bodies’training program presentation and course layout, all of the pro-grams present the same 24 specific topics, just in a differentorder. All training programs are required to have testing of 100questions. The testing may be broken into a different number ofmodules or testsdepending on theaccrediting bod-ies. The passingscore is 80 per-cent.

In theAppala chianBasin, the twomain training

programs by the accrediting bodies are IADC Rig Pass and PECBasic Safety Orientation, both of which are accredited asSafeLand USA training.

SafeLand USA – AWARE Rig Pass is accredited by IADCRig Pass as an extension of the IADC Rig Pass training program.It has been accredited since January 2014. The AWARE Rig Passtraining program provides instruction on the required 24 topicsof SafeLand USA and has the required testing totaling 100 ques-tions with the required passing score of 80 percent. It was devel-oped through a partnership with the oil and gas industry in theAppalachian Basin.

The SafeLand USA – AWARE Rig Pass program is fullyaccredited as SafeLand USA and will be accepted by whoeverrequires SafeLand USA as a basic safety orientation.

References: www.safelandusa.org, www.iadc.org. ■

Page 30 The PIOGA Press

Tax increase reversed on LNG

After considering the environmental and economic devel-opment benefits of using liquefied natural gas (LNG) asa vehicle fuel alternative to diesel, Acting Secretary of

Revenue Eileen McNulty recently announced that Governor Wolfhas reversed a decision made in late 2014 that increased state taxon LNG.

“One of my goals is to promote and develop a comprehensiveenergy portfolio for Pennsylvania that supports clean energyalternatives to imported petroleum,” said Wolf. “Liquefied natu-ral gas is not only a cleaner alternative to diesel, generatinglower pollutant emissions when used to fuel vehicles, but it’salso produced here in Pennsylvania from abundant natural gasreserves.

“Given the immediate environmental benefits of fuelingtrucks with LNG and the future economic gains that will comefrom further development of the alternative fuels industry inPennsylvania, it makes no sense to discourage LNG consumptionby taxing it at a higher rate.”

For 2015, a gallon of gasoline is subject to state tax of 50.5cents, while diesel is taxed at 64.2 cents per gallon.

LNG is defined in Pennsylvania law as an alternative fuel thatshould be taxed based on its energy potential as compared togasoline, and the Department of Revenue has historically taxedLNG using a cents-per-gallon basis indexed to gasoline. The pol-icy shift late last year, which followed a Department of Energychange in how LNG is measured at the federal level, applied thehigher diesel tax to LNG, effectively increasing the state tax onLNG by 4.3 cents per gallon.

The reversal of the tax change for LNG will be effectiveretroactively to January 1, 2015, the date the increase took effect.The new rate of 33.5 cents per gallon equivalent of LNG will bereflected in the March 13 edition of the Pennsylvania Bulletin. ■

New updates increase transparency of FracFocusBy Varun KroviEnergy In Depth

The Ground Water Protection Council and the Interstate Oiland Gas Compact Commission have announced improve-ments to FracFocus.org—the national database which dis-

closes the chemicals used in the hydraulic fracturing process.These updates will maximize transparency, providing the publicwith even easier access to information.

The upcoming improvements will:• Reduce the number of human errors in disclosures• Expand the public’s ability to search records• Provide public extraction of data in a “machine readable”

format• Update educational information on chemical use, oil and gas

production, and potential environmental impactsThe latest improvements to the website include installing a

new self-checking feature that will help companies detect andcorrect possible errors before the information is entered into thedatabase. Further, the search engine of the website has beenimproved, with the addition of new menus and new search terms,such as the “disclosure submission date.”

Finally, large amounts of data from the website will now beable to be extracted through “machine readable” data sets, great-ly enhancing the ability of educational institutions, organizationsand the public to learn more about the hydraulic fracturingprocess.

Currently, FracFocus has over 93,125 wells registered. As

we’ve noted before, President Obama’s former top energy andclimate adviser, Heather Zichal, expressed the White House’sstrong support for FracFocus.org: “As an administration, webelieve that FracFocus is an important tool that provides trans-parency to the American people,” she said.

U.S. shale development has fundamentally changed domesticand international energy markets, but the number-one priority isa commitment to operate in an environmentally sound manner,protecting the health and safety of the public and surroundingcommunities. The new update to FracFocus.org is one of manysteps in that process. ■

“PA Independent Oil and Gas Association”

February 2014 Page 31March 2015 Page 31

PIOGA Member News

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U.S. Gain and “O” Ring CNG partner to expandfueling opportunities

U.S. Gain is partnering with compressed natural gasprovider and station builder “O” Ring CNG FuelSystems, LP and its affiliates to co-brand “O” Ring

CNG’s existing fueling stations as “O” Ring CNG / GAIN CleanFuel and incorporate them into U.S. Gain’s nationwide infra-structure of CNG stations. Two of the four existing “O” RingCNG stations are located along Interstate 80—one in Brookvilleand the other in DuBois. The third is on Interstate 70 inBentleyville , just south of Pittsburgh, and the fourth on Route119 in Punxsutawney. “O” Ring CNG has several more stationsslated for completion 2015- 2016.

Through this partnership, U.S. Gain will have 43 stations inoperation or under construction throughout the United States. Inaddition, the partnership enables “O” Ring CNG to leverage U.S.Gain’s CNG stations for use with its partner carriers.

Schetroma elected to Steptoe & Johnsonexecutive committee

Steptoe & Johnson PLLC has elected attorney Russell L.Schetroma to serve as a member of its executive committee. Theseven-member committee is responsible for guiding and settingstrategy for the firm.

Schetroma is an energy law veteran with more than 40 yearsof experience and is widely regarded as the “dean ofPennsylvania energy law.” He serves as managing member of thefirm’s Meadville office and The Woodlands, Texas, office. Hislegal practice focuses on representation of oil and gas explo-ration and production companies in all aspects of their operationsincluding lease and other document design, negotiations, permit-ting, administrative proceedings, joint operating agreements, far-mouts, acquisitions, dispositions, due diligence reviews, titleexamination and reporting, financing, arbitration, mediation, andlitigation in state and federal courts. Schetroma is a frequentauthor and speaker at energy trade and professional events and isincluded among The Best Lawyers in America® for 2015.

BP Energy exceeds industry benchmarkfor customer satisfaction

BP Energy Co. exceeds the industry benchmark for customersatisfaction among its peer group, according to the leading inde-pendent measure of preference and performance. The results arefrom the 18th annual Natural Gas Marketers Study, whichMastio & Company conducted in late 2014. The company inter-viewed 981 representatives of commercial and industrial endusers, investor-owned utilities, independent power producers,retail energy providers, and local distribution companies in theU.S. and Canada. BP scores indicate that it is best-in-class infour categories: reliable natural gas supply, historic dependabili-ty, financial products and quality of information provided toenable decision making. BP’s performance was better than the

overall industry average in 18 of 22 performance categories.BP Energy Co. is a registered swap dealer and is the leading

energy marketer in North America, offering natural gas, powerand natural gas liquids. BP Energy Co. combines equity andthird-party supply with transport and storage to ensure optimalpricing and service quality for customers, serving more than3,000 commercial, industrial and utility customers, while alsoproviding hedging and risk-management services.

Curry expands product line with 2,500-gallonarticulated water truck

Curry Supply Company has teamed up with Hydrema US Inc.to produce 2,500-gallon articulated water trucks on a Hydremachassis. These new off-highway trucks are designed for use in avariety of industry applications including underground and sur-face mining, oil and gas, forestry, and construction. The low pro-file makes these vehicles ideal when working on rough to normalterrain where low operating height is a concern, or where unsta-ble ground conditions are a factor.

With the addition of this new product, Curry Supply offersoff-road articulated water trucks with 2,500- to 20,000-gallonwater tanks. All Curry Supply off-road articulated water trucksfeature a low center of gravity, a no-weld tank mounting design,interior tank coating that exceeds industry standards and an inter-locking baffle design for durability. ■

Page 32 The PIOGA Press

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Wells Drilled by CountyCounty Conventional Unconventional 2014 Total 2013 TotalGreene 4 255 259 126Susquehanna 0 238 238 206Washington 1 229 230 220McKean 214 11 225 211Warren 224 0 224 306Venango 170 0 170 165Butler 7 119 126 95Forest 111 0 111 172Bradford 1 93 94 108Lycoming 0 86 86 169Wyoming 0 58 58 67Elk 32 23 55 70Allegheny 1 34 35 12Lawrence 0 34 34 13Sullivan 0 34 34 15Armstrong 5 25 30 40Tioga 0 30 30 33Fayette 0 27 27 24Cameron 0 26 26 5Jefferson 0 16 16 4Beaver 0 12 12 10Mercer 0 12 12 21Crawford 9 0 9 13Westmoreland 1 6 7 29Clarion 5 0 5 11Clinton 1 2 3 3Cambria 2 0 2 1Centre 0 1 1 0Indiana 1 0 1 17Somerset 1 0 1 1Totals 790 1,371 2,161 2,174*

*Total includes some counties where no drilling occurred in 2014

2014 activity recap

Data source for the statistics presented in this section (unless otherwise noted):PA Department of Environmental Protection

Unconventional productioncontinues to climb

According to media reports in mid-February, Pennsylvania naturalgas production topped 4 Tcf for

2014. But Department of EnvironmentalProtection production statistics show3.78 Tcf of unconventional productionand 120.92 Bcf of conventional produc-tion for the year, bringing the total to3.896 Tcf. Perhaps the productionreports had been updated by the timewe looked at them in early March.

Operators of unconventional wellsmust self-report production twice annu-ally—January through June and Julythrough December (beginning at theend of this month, unconventional pro-duction will be reported monthly).Production from conventional wells isreported annually.

For the first six months of 2014,unconventional production totaled 1.80Tcf, increasing to 1.97 Tcf for the sec-ond half of the year, according to DEP’sproduction reporting website. Productionwas reported from 7,391 unconventionalwells in the first half of the year and8,045 for the second six months.

By comparison, Pennsylvania shalegas production totaled 3.1 Tcf in 2013and 2.04 in 2012.

The top three producing counties forthe second half of 2014 wereSusquehanna (478 Bcf), Bradford (406Bcf) and Washington (252 Bcf).

Condensate production from uncon-ventional wells totaled 3.98 million bar-rels—1.84 million in the first half of 2014and 2.14 million barrels in the secondsix-month period.

Conventional productionConventional gas production

declined from 215.9 Bcf in 2013 to120.9 Bcf last year. PIOGA President &Executive Director Lou D’Amico told thePittsburgh Tribune-Review that the dropin conventional gas is expected to con-tinue in 2015.

March 2015 Page 33

Top Gas-Producing States2012 vs. 2013

Source: U.S. Energy Information Administration Natural Gas Annual

2014 Drilling Permits Issued by County

First number is conventional, second number is unconventional.Conventional 1,271 / Unconventional 3,200 / Total 4,471

dsteffy@newprospect.comCell: (412) 667-9817

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DANIEL R. STEFFYNE Business Development ManagerEngineering, Completions and Drilling Consultants

“There is virtually no new conven-tional drilling going on at this time, andthe reason’s pretty simple — the eco-nomics just don’t warrant it,” he said.“It’s difficult enough with the bigMarcellus players with larger volumesof gas to attempt to make a dollar intoday’s environment. For the conven-tional operators, it’s totally impossible.”

Crude oil was a bright spot, climb-ing from 1.7 million barrels in 2013 to1.87 million barrels in 2014.Condensate production from conven-tional wells also increased, from124,098 barrels to 198,516 barrels,according to DEP reports.

DEP’s reports can be found atwww.paoilandgasreporting.state.pa.us/publicreports. ■

Page 34 The PIOGA Press

2014 Wells Drilled by OperatorOperator Conventional Unconventional Total

EQT Production Co 0 171 171

Range Resources Appalachia LLC 0 165 165

Cabot Oil & Gas Corp 0 106 106

Southwestern Energy Prod Co 0 106 106

Chief Oil & Gas LLC 0 97 97

Chesapeake Appalachia LLC 0 93 93

Catalyst Energy Inc 79 0 79

Seneca Resources Corp 1 70 71

CNX Gas Co LLC 0 68 68

Trimont Energy LLC 59 0 59

Rice Drilling B LLC 0 50 50

Chevron Appalachia LLC 0 48 48

Hilcorp Energy Co 0 44 44

RE Gas Dev LLC 0 41 41

XTO Energy Inc 0 41 41

Talisman Energy USA Inc 1 36 37

Noble Energy Inc 0 33 33

Lendrum Energy LLC 30 0 30

Vista Opr Inc 30 0 30

Howard Drilling Inc 29 0 29

MSL Oil & Gas Corp 29 0 29

Devonian Resources Inc 28 0 28

PennEnergy Resources LLC 0 28 28

Vantage Energy Appalachia II LLC 0 28 28

Cameron Energy Co 27 0 27

Energy Corp Of America 0 27 27

ARG Resources Inc 24 0 24

Snyder Bros Inc 18 6 24

Enervest Opr LLC 20 0 20

SWEPI LP 0 20 20

D&S Energy Corp 19 0 19

EM Energy PA LLC 0 19 19

Gas & Oil Mgmt Assoc Inc 19 0 19

Inflection Energy (PA) LLC 0 19 19

Anadarko E&P Onshore LLC 0 17 17

Minard Run Oil Co 16 0 16

NTS Energy LLC 16 0 16

MDS Energy Dev LLC 0 13 13

Stateside Energy Group LLC 13 0 13

Sylvan Energy LLC 13 0 13

Titusville Oil & Gas Assoc Inc 13 0 13

Airdale Oil & Gas LLC 12 0 12

Branch John D 12 0 12

Bull Run Energy LLC 11 0 11

Operator Conventional Unconventional Total

PA Gen Energy Co LLC 0 11 11

SLT Production LLC 10 0 10

Kastle Resources Enterprises Inc 9 0 9

Kylander Oil Inc 9 0 9

Pecora Enterprises 9 0 9

Universal Resources Holdings Inc 9 0 9

Autumn Ridge Energy LLC 8 0 8

SV ABS Interest Wetmore Proj 8 0 8

Wilmoth Interests Inc 8 0 8

Chautauqua Energy Inc 7 0 7

Curtis Oil Inc 7 0 7

Dannic Energy Corp 7 0 7

Mead Oil LLC 7 0 7

Northwestern Well Svc Inc 7 0 7

D&M Energy LLC 6 0 6

Interstate Gas Mkt Inc 6 0 6

Weldbank Energy Corp 6 0 6

Xite Energy Inc 6 0 6

B&B Resources 5 0 5

Coastal Petro Corp 5 0 5

KCS Energy Inc 5 0 5

Lindell & Maney LLC 5 0 5

Mieka LLC 5 0 5

Missing Moon Oil Inc 5 0 5

Pembrooke Oil & Gas Inc 5 0 5

Penneco Oil Co Inc 5 0 5

Aiello Bros Oil & Gas Inc 4 0 4

Batista Mark F 4 0 4

BF Adventures LLC 4 0 4

Galati Enterprises Inc 4 0 4

MJ Oil LLC 4 0 4

Otter Exploration Inc 4 0 4

Remington Capital Holdings Inc 4 0 4

Rick & Sons Oil LLC 4 0 4

Russ Holden Well Svc 4 0 4

Bailey & Holden Oil 3 0 3

BJS LLC 3 0 3

Daniel P Hornburg 3 0 3

Jett Oil LLC 3 0 3

McCool John E 3 0 3

Oz Gas Ltd 3 0 3

RB Robertson & Son Gas & Oil Co 3 0 3

Roilwell Inc 3 0 3

Susquehanna Expl & Prod LLC 3 0 3

Vantage Energy Appalachia LLC 0 3 3

March 2015 Page 35

Operator Conventional Unconventional Total

Warren E&P Inc 0 3 3

WB Prod Mgmt Co 3 0 3

Willard M Cline 3 0 3

Curtin & Curtin 2 0 2

Holden Oil & Gas 2 0 2

Leali & Leali Oil Inc 2 0 2

Marcellx LLC 2 0 2

Mark & Troy Johnson 2 0 2

New Horizon Oil LLC 2 0 2

R&N Resources LLC 2 0 2

Redmill Drilling 0 2 2

Samson Exploration LLC 0 2 2

US Energy Exploration Corp 2 0 2

Apex Energy (PA) LLC 0 1 1

Arrington Oil & Gas Operating LLC 0 1 1

Bald Hill Oil 1 0 1

Bearcat Oil Co LLC 1 0 1

Bittinger Drilling LA Bittinger DBA 1 0 1

Campbell Oil & Gas Inc 0 1 1

David L Hill 1 0 1

Dominion Trans Inc 1 0 1

Dri Opr Co 1 0 1

Exco Resources Pa LLC 0 1 1

Jalog Oil & Gas LLC 1 0 1

Jesmar Energy Inc 1 0 1

Koebley Timothy W 1 0 1

Lt Oil Co LLC 1 0 1

Marco Drilling Inc 1 0 1

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Operator Conventional Unconventional Total

Mcgaughey Scott 1 0 1

Old Glory Energy LLC 1 0 1

Pierce & Petersen 1 0 1

Stonehaven Energy Mgt Co LLC 1 0 1

Whilton Brooks A 1 0 1

William Mcintire Coal Oil & Gas 1 0 1

Totals 790 1,371 2,161

What types of wells were drilled in 2014?Unconventional

Horizontal 1,352

Vertical 19

Conventional

Oil 703

Gas 14

Combined oil & gas 64

Coalbed methane 1

“Multiple well bore type” 1

Injection 7

Page 36 The PIOGA Press

$40.00

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Natural Gas Futures Closing PricesAs of March 6

Month PriceApril 2015 2.757May 2.790June 2.906July 2.957August 2.974September 2.962October 2.909November 3.078December 3.195January 2016 3.293February 3.339March 3.286

Oil & Gas TrendsPenn Grade Crude Prices

February 2014 Page 37March 2015 Page 37

SourcesAmerican Refining Group: www.amref.com/Crude-Prices-New.aspxErgon Oil Purchasing: www.ergon.com/prices.phpGas futures: http://quotes.ino.com/exchanges/?r=NYMEX_NGBaker Hughes rig count: http://gis.bakerhughesdirect.com/ReportsNYMEX strip chart: Emkey Energy LLC emkeyenergy.com

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Pennsylvania Rig Count

Advertise Your Products & ServicesContact Matt Benson, 814-778-2291 / matt@pioga.org

Page 38 The PIOGA Press

New PIOGA members — welcome!

B&B Oilfield Equipment Corp.P.O. Box 492, Mount Pleasant, MI 48804-0492989-773-6403www.bboilfieldeq.comService Provider

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Daniel B. Grove8590 Remington Drive, Pittsburgh, PA 15237Associate

Huntington Insurance9218 Route 119 South, Blairsville, PA 15717724-313-0902www.huntington.comProfessional Firm

Have industry colleagues or vendors you thinkshould be PIOGA members? Encourage them toclick on “Join PIOGA” at the top of ourhomepage, www.pioga.org. There’s strength innumbers!

PIOGA Board of DirectorsGary Slagel (Chairman), Steptoe & Johnson PLLC (representing

CONSOL Energy)Sam Fragale (Vice Chairman), SEF Consulting, LLCFrank J. Ross (2nd Vice Chairman), T&F Exploration, LPJames Kriebel (Treasurer), Kriebel CompaniesCraig Mayer (Secretary), Pennsylvania General Energy Co., LLCTerrence S. Jacobs (Past President), Penneco Oil Company, Inc.L. Richard Adams, Chief Oil and GasThomas M. Bartos, ABARTA EnergyStanley J. Berdell, BLX, Inc.Rob Boulware, Seneca Resources CorporationCarl Carlson, Range Resources - Appalachia, LLCMike Cochran, Energy Corporation of AmericaDon A. Connor, Open Flow EnergyTed Cranmer, TBC ConsultingJack Crook, Atlas Resource Partners, LPRobert Esch, American Refining Group, Inc.Michael Hillebrand, Huntley & Huntley, Inc.Jim Hoover, Phoenix Energy Productions, Inc. Ron McGlade, Tenaska Resources, LLCJim McKinney, EnerVest Operating, LLCSteve Millis, Vineyard Oil & Gas CompanyGregory Muse, PennEnergy Resources, LLCJoy Ruff, Dawood Engineering, Inc.Stephen Rupert, Texas Keystone, Inc.Jake Stilley, Patriot Exploration CorporationBurt A. Waite, Moody and Associates, Inc.Roger B. Willis, Universal Well Services, Inc.Thomas Yarnick, XTO Energy

Committee ChairsEnvironmental Committee

Paul Hart, Fluid Recovery Services, LLCKen Fleeman, ABARTA Energy

Legislative CommitteeBen Wallace, Penneco Oil CompanyHolly Christie, Steptoe and Johnson, PLLC

Pipeline & Gas Market Development CommitteeBob Eckle, Appalachian Producer Services, LLCRon McGlade, Tenaska Resources, LLC

Health & Safety CommitteePat Carfagna, CONSOL Energy

Meetings CommitteeLou D’Amico, PIOGA

Tax CommitteeDonald B. Nestor, Arnett Foster Toothman, PLLC

Communications CommitteeTerry Jacobs, Penneco Oil Company, Inc.

StaffLou D'Amico (lou@pioga.org), President & Executive DirectorKevin Moody (kevin@pioga.org), Vice President & General Counsel Debbie Oyler (debbie@pioga.org), Director of Member ServicesMatt Benson (matt@pioga.org), Director of Internal Communications

(also newsletter advertising & editorial contact)Joyce Turkaly (joyce@pioga.org), Director of Natural Gas Market

DevelopmentDan Weaver (dan@pioga.org), Public Outreach DirectorDanielle Boston (danielle@pioga.org), Director of AdministrationChris Lisle (chris@pioga.org), Manager of Finance Tracy Zink (tracy@pioga.org), Administrative Assistant

Pennsylvania Independent Oil & Gas Association115 VIP Drive, Suite 210 • Wexford, PA 15090-7906724-933-7306 • fax 724-933-7310 • www.pioga.org

Northern Tier Office (Matt Benson)Mail: P.O. Box L, Mount Jewett, PA 16740-0554

Physical address: 167 Wolf Farm Road, Kane, PA 16735Phone/fax 814-778-2291

© 2015, Pennsylvania Independent Oil & Gas Association

February 2014 Page 39March 2015 Page 39

PIOGA EventsPIOGA Summer Picnic & Golf Outing

June 1 , Wanango Golf Club, RenoInfo: www.pioga.org/events/category/pioga-events

PIOGA Pig Roast, Equipment Show & SeminarJuly 28-29, Seven Springs Mountain Resort, ChampionInfo: www.pioga.org/events/category/pioga-events

18th Annual Divot Diggers Golf OutingAugust 26, Tam O’Shanter of Pennsylvania, Hermitage Info: www.pioga.org/events/category/pioga-events

Eastern Oil & Gas Conference and Trade ShowOctober 27-28, Monroeville Convention Center, MonroevilleInfo: www.pioga.org/events/category/pioga-events

Industry EventsIPAA Midyear Meeting

June 24-26, Eldorado Hotel & Spa, Santa Fe, NMInfo: hwww.ipaa.org/meetings-events

KOGA Annual MeetingJuly 14-16, Hyatt Regency Lexington, KYInfo: koga.memberclicks.net/2015-annual-meeting

IOGANY Summer MeetingJuly 8-9, Peek'n Peak Resort & Conference Center,Findley Lake, NYInfo: www.iogany.org/events.php

IOGAWV Summer MeetingAugust 2-4, The Greenbrier, White Sulphur Springs, WVInfo: events.iogawv.com

IOGANY 35th Annual MeetingOctober 21-22, Buffalo Marriott Niagara, Amherst, NYInfo: www.iogany.org/events.php

IPAA Annual MeetingNovember 9-10, The Ritz-Carlton, New Orleans, LAInfo: hwww.ipaa.org/meetings-events

Calendar of Events

➤ More events: www.pioga.org

Integrated Environmental Systems368 Commercial Street, Suite 100, Bridgeville, PA 15017412-564-5800www.ies-pgh.comService Provider

John NealenP.O. Box 221, Nicktown, PA 15762Royalty Owner

The Novosel Family TrustP.O. Box 682, Kane, PA 16735Royalty Owner

PLH Group400 East Las Colinas Boulevard, Suite 800, Irving, TX 75039469-206-5872www.plhgroupinc.comService Provider

115 VIP Drive, Suite 210Wexford, PA 15090-7906

Address Service Requested

We can provide not only complete builds, but custom builds to any degree of completion, including providing certified pressure vessels and "R" stamp repair for existing vessels

Miller Rig Works is a custom equipment builder supporting the gas and oil well cementing industry. MRW specializes in silo setter trucks.

Bulk Cement Silos Built ASME Certified "U" Stamp Registered with National Board Rated for 37 PSI 96 inch footprint on site 1000 cubic foot capacity

Miller Rig Works, Inc.

724-478-5537

www.millerrigworks.com