the pioga press - november 2015 issue

32
November 2015 • Issue 67 The PIOGA press The monthly newsletter of the Pennsylvania Independent Oil & Gas Association (Continues on page 3) (Continues on page 26) Dr. Bernard Weinstein of SMU’s Maguire Energy Institute told how shale oil and gas fit into the world energy picture. ® P IOGA’s Lou D’Amico put it this way in his welcome mes- sage found in the printed program for our October 27-28 Eastern Oil & Gas Conference and Trade Show: “Perhaps it’s crazy to stage an event like ours in a year like this. After all, prices are stuck in the basement, regulations continue going through the roof and here in Pennsylvania we have a governor hell bent on delivering an eviction notice in the form of a sever- ance tax. Drilling has slowed dramatically, and many companies have pared back to the bone. “However, we think the current difficult climate makes our PIOGA’s 2015 EOGCTS in review Eastern Oil & Gas Conference and Trade Show all the more rele- vant,” he continued. “We need expert opinions on how and when pipeline projects and new market opportunities will provide relief. We need to learn how other companies are coping with the present and planning for the future. We need assurance there are people working on our behalf to halt new taxes and burdensome regulations. We need to hear about new products and services that can help us do our jobs more efficiently, making the bottom line look less ghoulish (if you’ll allow me a Halloween refer- ence).” Based on the positive input staff received at the event and since, we think the 2015 edition of the EOGCTS lived up to those expectations. By no means was it the largest of these annu- al events, but exhibitors and attendees alike felt it was a worth- while experience. The biggest question on everyone’s mind is, when will prices turn around and how do we best cope in the meantime? A large PIOGA, what have you done for me lately? By Lou D’Amico President & Executive Director Y ou don’t need me to tell you the industry is in rough shape due to persistent, oppressively low product prices. Drilling is the lifeblood of our business, and the Spud Report found elsewhere in this newsletter shows that just 78 wells were started in October—69 unconventional gas wells and a handful of oil wells. No one is drilling conventional gas wells these days. Compare that against last October, when 229 wells were spudded. Producers and the companies that serve them are cutting back and hoping to survive until things turn around. One of the expenses your company may be considering forgoing is your PIOGA membership dues. Since we are nearing the time of year when the bulk of our members are up for renewal, I want to take a few minutes telling you why your membership is a better value House says no to severance tax. . . . . . . . . . . 4 Court rules against Grant Township . . . . . . . . 6 PIOGA’s role in the Grant Township case. . . . 8 New Buyers’ Guide goes live . . . . . . . . . . . . 11 Favorable ruling in Allegheny Township . . . . 12 No Chapter 78 support from committees . . . 16 Power plants and pipeline insurance . . . . . . 19 Benefits of PIOGA’s members-only site . . . . 20 Renewing via the member site . . . . . . . . . . . 20 PIOGA questions PNDI fee authority . . . . . . 21 ANF mineral rights bill introduced. . . . . . . . . 22 DEP’s Office of Environmental Justice . . . . . 22 WOTUS rule stayed nationwide . . . . . . . . . . 23 Tri-state shale agreement announced . . . . . 24 PIOGA Member News . . . . . . . . . . . . . . . . . 24 Profile your company . . . . . . . . . . . . . . . . . . 25 Oil & Gas Trends . . . . . . . . . . . . . . . . . . . . . . 28 October Spud Report . . . . . . . . . . . . . . . . . . 30 New PIOGA members . . . . . . . . . . . . . . . . . 31 Calendar of Events . . . . . . . . . . . . . . . . . . . . 31 PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 31

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The monthly journal of the Pennsylvania Independent Oil & Gas Association (PIOGA)

TRANSCRIPT

Page 1: The PIOGA Press - November 2015 issue

November 2015 • Issue 67

ThePIOGA press

The monthly newsletter of the Pennsylvania Independent Oil & Gas Association

(Continues on page 3)

(Continues on page 26)

Dr. Bernard Weinstein of SMU’s Maguire Energy Institute toldhow shale oil and gas fit into the world energy picture.

®

PIOGA’s Lou D’Amico put it this way in his welcome mes-sage found in the printed program for our October 27-28Eastern Oil & Gas Conference and Trade Show: “Perhaps

it’s crazy to stage an event like ours in a year like this. After all,prices are stuck in the basement, regulations continue goingthrough the roof and here in Pennsylvania we have a governorhell bent on delivering an eviction notice in the form of a sever-ance tax. Drilling has slowed dramatically, and many companieshave pared back to the bone.“However, we think the current difficult climate makes our

PIOGA’s 2015 EOGCTS in reviewEastern Oil & Gas Conference and Trade Show all the more rele-vant,” he continued. “We need expert opinions on how and whenpipeline projects and new market opportunities will providerelief. We need to learn how other companies are coping with thepresent and planning for the future. We need assurance there arepeople working on our behalf to halt new taxes and burdensomeregulations. We need to hear about new products and servicesthat can help us do our jobs more efficiently, making the bottomline look less ghoulish (if you’ll allow me a Halloween refer-ence).”Based on the positive input staff received at the event and

since, we think the 2015 edition of the EOGCTS lived up tothose expectations. By no means was it the largest of these annu-al events, but exhibitors and attendees alike felt it was a worth-while experience.The biggest question on everyone’s mind is, when will prices

turn around and how do we best cope in the meantime? A large

PIOGA, what have you donefor me lately?By Lou D’AmicoPresident & Executive Director

You don’t need me to tell you the industry is in roughshape due to persistent, oppressively low product prices.Drilling is the lifeblood of our business, and the Spud

Report found elsewhere in this newsletter shows that just 78wells were started in October—69 unconventional gas wells anda handful of oil wells. No one is drilling conventional gas wells

these days. Compare that against lastOctober, when 229 wells were spudded.Producers and the companies that servethem are cutting back and hoping tosurvive until things turn around.One of the expenses your company

may be considering forgoing is yourPIOGA membership dues. Since we arenearing the time of year when the bulkof our members are up for renewal, Iwant to take a few minutes telling youwhy your membership is a better value

House says no to severance tax. . . . . . . . . . . 4Court rules against Grant Township . . . . . . . . 6PIOGA’s role in the Grant Township case. . . . 8New Buyers’ Guide goes live . . . . . . . . . . . . 11Favorable ruling in Allegheny Township . . . . 12No Chapter 78 support from committees . . . 16Power plants and pipeline insurance . . . . . . 19Benefits of PIOGA’s members-only site . . . . 20Renewing via the member site . . . . . . . . . . . 20PIOGA questions PNDI fee authority . . . . . . 21ANF mineral rights bill introduced. . . . . . . . . 22

DEP’s Office of Environmental Justice . . . . . 22WOTUS rule stayed nationwide . . . . . . . . . . 23Tri-state shale agreement announced . . . . . 24PIOGA Member News . . . . . . . . . . . . . . . . . 24Profile your company . . . . . . . . . . . . . . . . . . 25Oil & Gas Trends. . . . . . . . . . . . . . . . . . . . . . 28October Spud Report . . . . . . . . . . . . . . . . . . 30New PIOGA members . . . . . . . . . . . . . . . . . 31Calendar of Events . . . . . . . . . . . . . . . . . . . . 31PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 31

Page 2: The PIOGA Press - November 2015 issue

Page 2 The PIOGA Press

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Page 3: The PIOGA Press - November 2015 issue

February 2014 Page 3November 2015 Page 3

EOGCTS: Continued from page 1

portion of the conference was dedicated toaddressing just that.

A panel discussion of industry leadersopened the sessions, with Ken Mariani ofEnerVest, Joe Frantz of Range Resourcesand Craig Neal of CNX Gas Company.Frantz assured conferees, “We’ve seenthese cycles before, and we’ll get throughit.” The three agreed that 2016, at least,will be a challenge for the industry.

The executives addressed the opportuni-ties presented by ethane and the construc-tion of one or more cracker plants in theregion, the importance of low-cost capitalin long-term drilling programs, opportuni-ties for acquisitions and the impact of“anti” groups, who now have turned theiropposition to pipeline projects. On the lat-ter point, the speakers emphasized theneed to get employees engaged in supporting pipelines and otherindustry projects and accentuate how oil and gas companies arean integral part of communities.

Tim Knobloch of James Knobloch Petroleum Consultants,Inc. and Martin Shumway of Shumway Resources, LLC showedthat despite the downturn in prices, there continues to be consid-erable merger and acquisition activity in the Marcellus and Uticashales. They provided data showing 203 such deals from 2010 to2014, with a total value of $48.8 billion. More than 8,000 shalewells have been drilled at an estimated cost of $64 billion, put-ting total investment by producers in the Marcellus and Utica inexcess of $126 billion.

Knobloch and Shumway also analyzed data for unconvention-al production in the basin and found that 16 operators accountfor 80 percent of production. Similarly, 20 counties inPennsylvania, Ohio and West Virginia account for 80 percent ofproduction. Based on data available to far, they put estimatedultimate recovery (EUR) at 45,000 Bcf in Pennsylvania, 6,000Bcf in West Virginia and 4,220 Bcf in Ohio. Looking at EUR foroil and natural gas liquids, Ohio leads with 130.8 million barrels,Pennsylvania at 49.4 million barrels and West Virginia, 32.9 mil-lion barrels.

Michael Bennett of BTU Analytics was the first of threespeakers to address pricing and where markets are headed.Although he anticipates a couple more years of low prices,Bennett advised that as pipeline expansions come into service,capacity constraints will push out in all directions from theNortheast until there is ample connectivity between Marcellusand Utica supply and end markets, collapsing spreads towardNortheast cost of supply. By 2018, when more than 22 Bcf/d ofincremental takeaway capacity comes on line, firm capacity com-mitments will move from being an asset to a liability as excesstakeaway capacity will be available at variable rates. In terms ofbright spots, Bennett asserted that domestic demand will grow toabsorb some excess supply, with the market looking towardexports to Mexico and overseas in the form of LNG to accountfor the remaining oversupply.

Dr. Bernard Weinstein with the Maquire Energy Institute atSouthern Methodist University looked at the role of unconven-

tional oil and gas production in the bigger economic picture.Shale oil and gas has had a tremendous impact on the economy,but that impact is now negative due to the industry’s contraction.He argued that politicians need to understand the industry’s eco-nomic impact and the relationship between a healthy oil and gasindustry and a robust economy.

Despite the current low prices, Weinstein sees a positive long-term outlook for the Marcellus in Pennsylvania. “Natural gas iswhere it’s at,” he said, pointing to growing use as a fuel in powergeneration, industry and home heating, among others. He saiddemand can be boosted further by pushing for expedited permit-ting for LNG export terminals, more substitution of natural gasfor coal and fuel oil in power generation, construction of moretakeaway capacity, investment in infrastructure to support CNGand LNG for over-the-road trucks, and stressing the environmen-tal benefits of gas over other fossil fuels.

Tim Bigler of Direct Energy also addressed the marketdynamics impacting oil and gas pricing. Influencing prices goingforward on a global basis, he pointed to production decisions byRussia and Saudi Arabia, Canadian oil sands output, Mexicancrude oil output, and he argued that the unpredictable wildcard isgeopolitical events, which can quickly and dramatically shiftpricing up or down.

Closer to home, Bigler cited what he expects to be positiveimpacts brought about by record power sector demand for natu-ral gas, industrial use, LNG exports and natural gas exports toMexico. Addressing the question of when natural gas demandwill catch up with supply, he presented a chart showing the twoconverging as 2019 approaches.

The view from HarrisburgPennsylvania House Speaker Mike Turzai, a Republican rep-

resenting the North Hills area of Allegheny County, addressedthe conference via video link. A staunch opponent of a severancetax on natural gas, he instead prefers to boost the industry’simpact on state revenue by encouraging further development (seerelated article, page 4). He said he is preparing to introduce leg-islation creating Keystone Energy Enhancement Zones, whichwould offer tax breaks to manufacturing, petrochemical and

The trade show floor was a busy place on Tuesday morning as the event got under way.

Page 4: The PIOGA Press - November 2015 issue

Page 4 The PIOGA Press

other large downstream users of natural gas. The legislationwould also foster growth of transmission and distributionpipelines for natural gas and natural gas liquids.

He encouraged the industry to keeping hammering the themes“jobs and energy independence.”

“People need to understand the broad impact you’re having,”Turzai told the gathering.

Turzai also addressed overregulation of Pennsylvania’s con-ventional producers, saying that Act 13 of 2012 was not designedwith conventional producers in mind, yet that law is the basis onnew regulations being proposed by the Department ofEnvironmental Protection. Senate Bill 1011 would force DEP tostart over again with its Conventional 78 rulemaking aimed atconventional operations. Further, Turzai said conventional pro-ducers are suffering from over-enforcement by DEP, whichseems to be part of a larger effort by the Wolf administration toimpose a de facto moratorium on the Commonwealth’s oil andgas industry.

Other topicsAmong other speakers at the day-and-a-half-long conference:• Martin J. Saunders of Steptoe & Johnson, PLLC addressed

changes in National Labor Relations Board procedures andtrends in workplace organizing. He provided employers with alist of actions to take when there are signs union activity may beimminent.

• Tim Ericksen with Moody and Associates, Inc. argued thatmethane migration is one of the industry’s largest problems. Heprovided advice on how to address stray gas incidents, includingdata collection and interpretation to determine how and why gasgot where it didn’t belong.

•John Carroll of Pepper Hamilton, LLP discussed pooling andunitization in Pennsylvania. The Oil and Gas Conservation Lawhas not applied to the Marcellus Shale, but it will for the Utica.He indicated there are many questions how this 1961 law will beapplied in the era of horizontal drilling and unconventionaldevelopment.

Speaker presentations can be found in PIOGA’s MembersOnly site on the Advocacy/Resource page. ■

House says no to severance tax

State lawmakers have again rejected Governor Tom Wolf’sproposal to impose a natural gas severance tax. The latestaction came last month, when the House of

Representatives voted down the governor’s tax package in anattempt to break a budget stalemate between the first-termDemocratic governor and the GOP-led General Assembly.

Wolf campaigned on a promise to use a severance tax to gen-erate up to $1 billion annually for public education. His pro-posed budget for the 2015-16 fiscal year included a tax onunconventional production of 5.0 percent plus 4.7 cents per Mcf,which he claimed was modeled after West Virginia’s severancetax. The Pennsylvania’s version, however, included a floor priceof $2.97 per Mcf for the tax, no matter how low market pricesfall.

Pennsylvania’s existing impact fee (tax) on unconventionalwells—which represented a tax of approximately 1.5 to 2 per-cent when instituted, but at current gas prices equates to approx-imately 7 percent—would have been repealed under the gover-nor’s plan.

Near the statutory deadline of June 30 for approving a statebudget, General Assembly delivered the governor a spendingpackage that omitted a severance tax and other new or increasedtaxes that Wolf had proposed. The governor responded by veto-ing the entire package, setting in motion an impasse withRepublicans and leaving the state without a budget.

Wolf continues to insist there is a need to increase taxes andclaiming that our industry isn’t paying its fair share. TheRepublican leadership, meanwhile, is steadfastly against raisingtaxes, and has heard loud and clear that our industry does indeedpay its share and can’t bear a new tax at this time anyway.

House leaders agreed to give the governor an up-or-downvote in October on the spending plan of his choice. Wolfresponded with a package that included an increase in the state’spersonal income tax from 3.07 percent to 3.57 percent and arevised severance tax of 3.5 percent plus 4.7 cents/Mcf, no floorprice, and no repeal of the annual per-well impact fee stronglysupported by municipal and county governments.

The administration estimated the revised plan would producenearly $1.4 billion in new, recurring revenue for the current fis-cal year and almost $2.4 billion in recurring revenue for the nextfiscal year, the first full year of the plan. The governor claimedthe severance tax portion would generate $99 million for the restof the current fiscal year and $578 in the first full year of imple-mentation.

The gas tax plan would also have allowed a producer toreduce the gross value of its gas, on which the 3.5-percent tax isapplied, by the amount of their post-production costs, up to 15percent of the gross value. However, the producer would not beallowed to deduct those post-production costs from the mini-mum royalty payments of 12.5 percent.

To advance the proposal, the governor needed everyDemocrat and 12 Republicans to go along with him. Instead, allof the Republicans voted no, along with nine Democrats. Themessage is clear that there are other ways out of the state’sfinancial woes other than increasing the tax burden. We as anindustry are gratified by that, even though there’s still is no clearpath to a budget agreement five months after the last budgetexpired.

House Speaker Mike Turzai addresses the conference fromHarrisburg, emphasizing there are better ways for the industry tocontribute to state revenue than via a severance tax.

Page 5: The PIOGA Press - November 2015 issue

February 2014 Page 5November 2015 Page 5

Page 6: The PIOGA Press - November 2015 issue

Page 6 The PIOGA Press

Federal court invalidatesportions of a local ordinancethat banned the use ofunderground injection wells

On October 14, the United States District Court for theWestern District of Pennsylvania invalidated several sec-tions of a Grant Township, Indiana County, local ordi-

nance that was enacted in an attempt to prevent an oil and gasoperator from operating an underground injection well that hadbeen permitted by the United States Environmental ProtectionAgency (EPA). In Pennsylvania General Energy Company,L.L.C. v. Grant Township, Civil Action No. 14-209, 2015 U.S.Dist. LEXIS 139921 (W.D. Pa. Oct. 14, 2015), PennsylvaniaGeneral Energy Company, L.L.C. (PGE) filed a federal com-plaint against Grant Township to challenge the constitutionality,validity and enforceability of a self-described Community Bill ofRights Ordinance. Babst, Calland, Clements and Zomnir, P.C. inPittsburgh represents PGE in this case.

PGE drills for and produces natural gas in Grant Townshipand other municipalities in Pennsylvania. PGE sought to reclassi-fy an existing gas production well located in Grant Township asan underground injection well for disposal of produced fluid.EPA is responsible for implementing the Underground InjectionControl (UIC) Program under the federal Safe Drinking WaterAct, and for regulating the construction, operation, permittingand closure of injection wells that place fluids underground fordisposal. Produced fluid can be treated and/or disposed of atcommercial treatment facilities or injected into permitted UICwells. When deciding whether to issue a UIC permit, EPA mustdetermine whether the proposed injection operation will safelyprotect underground sources of drinking water from the subsur-face injection of fluids. In this regard, UIC permits, like the oneissued to PGE, condition subsurface operations on stringent wellintegrity and operational requirements.

On March 19, 2014, EPA issued to PGE a UIC permit toauthorize the injection of brine and produced fluids into the for-mer production well. The permit subsequently was unsuccessful-ly appealed to the United States Environmental Appeals Board.

Shortly thereafter, on June 3, 2014, Grant Township adoptedthe ordinance, designed to prevent PGE’s efforts to pursue itsrights under the EPA-issued UIC permit. The ordinance statesthat it is “establishing a Community Bill of Rights for the peopleof Grant Township, Indiana County, Pennsylvania, which pro-hibits activities and projects that would violate the Bill of Rights,and which provides for enforcement of the Bill of Rights.” Theordinance expressly prohibits any corporation or governmentfrom depositing within Grant Township waste from oil and gasextraction activities and invalidates any state or federal injectionwell permit. “Depositing of waste from oil and gas extraction” isdefined broadly in the ordinance to include the following:

The depositing, disposal, storage, beneficial use,treatment, recycling, injection, or introduction ofmaterials including, but not limited to, brine, “pro-duced water,” “fract [sic] water,” tailings, flowbackor any other waste or by-product of oil and gasextraction, by any means. The phrase shall also

include the issuance of, orapplication for, any permitthat would purport to allowthese activities.

The ordinance likewise broadly defines “extraction” to mean“the digging or drilling of a well for the purposes of exploringfor, developing or producing shale gas, oil, or other hydrocar-bons.” Corporations that violate or seek to violate the ordinance“shall not be deemed to be ‘persons,’ nor possess any other legalrights, privileges, powers, or protections,” and are denied theright to challenge the ordinance on preemption or other grounds.

The operation of oil and gas wells unavoidably and necessari-ly requires engaging in the disposal of waste from oil and gasextraction. Any producing oil and gas well will also producebrine and other fluids, which must be properly disposed of by theoperator. One lawful means of disposing of these produced fluidsis by using a permitted underground injection well, which iswhat PGE sought to do in Grant Township.

In response to the passage of the ordinance, PGE filed a com-plaint in the United States District Court in which it sought (i) adeclaration that the ordinance is unconstitutional and invalidunder state law, (ii) an injunction to prohibit Grant Townshipfrom enforcing the ordinance, and (iii) compensatory damages,attorneys’ fees and costs. PGE filed a motion for judgment on thepleadings in which PGE asked the District Court to enter judg-ment in PGE’s favor as a matter of law based on the factual andlegal averments in its complaint.

The court granted in part PGE’s Motion for judgment on thepleadings. The court held that the provisions of the ordinancethat make it unlawful for a corporation to deposit oil and gasextraction waste and the provisions that nullify state or federalpermits were invalid and unenforceable under the Second ClassTownship Code because Grant Township exceeded the scope ofits authority under that law. The court also struck down theseprovisions as being exclusionary because they banned a legiti-mate use.

The district court also invalidated the provisions of the ordi-nance that attempted to strip corporations of their legal rights andprevent them from challenging the ordinance in court as beingpreempted by the Pennsylvania Limited Liability Company Law(which expressly provides that corporations shall have the legalcapacity of natural persons to act) and the Second ClassTownship Code (which expressly provides that persons aggrievedby a local ordinance have the right to challenge the legality ofthe offending ordinance in court).

The court declined to rule on the constitutionality of the ordi-nance at this time because it found that the challenged provisionswere invalid under state law. The court enjoined Grant Township

Kevin J. Garber James V.Corbelli

Authors:

Alana E. Fortna

Page 7: The PIOGA Press - November 2015 issue

February 2014 Page 7November 2015 Page 7

Pre-Drilling Water Supply Inventory and Sampling

Post-Drilling Complaint Resolution and Investigations

Gas Well Permitting for Conventional and

Unconventional Plays

Development of High Capacity Groundwater Supply Wells

Soil & Groundwater Contamination Investigations

Assistance with Water Sourcing

Water Management Plan Preparation

SPCC/Control & Disposal Plans

Pre-Drilling Water Supply Inventory and Sampling

Post-Drilling Complaint Resolution and Investigations

Gas Well Permitting for Conventional and

Unconventional Plays

Development of High Capacity Groundwater Supply Wells

Soil & Groundwater Contamination Investigations

Assistance with Water Sourcing

Water Management Plan Preparation

SPCC/Control & Disposal Plans

Disposal Well Permitting

Erosion & Sedimentation Control Planning

Fresh Water Determination Studies

Soil and Groundwater Remediation

Stray Gas Migration Investigations

Hydrogeologic Studies

Expert Witness Testimony

Wetland Delineation and Aquatic Surveys

Disposal Well Permitting

Erosion & Sedimentation Control Planning

Fresh Water Determination Studies

Soil and Groundwater Remediation

Stray Gas Migration Investigations

Hydrogeologic Studies

Expert Witness Testimony

Wetland Delineation and Aquatic Surveys

Oil and Natural Gas Development ServicesOil and Natural Gas

Development Services

Meadville PAHouston PAWaverly NY

Visit us online at: www.moody-s.com

Groundwater & Environmental Professionals Since 1891Groundwater & Environmental Professionals Since 1891

Page 8: The PIOGA Press - November 2015 issue

Page 8 The PIOGA Press

from enforcing the invalidated sections of the ordinance and willnow take up the issues of the constitutionality of the ordinanceand other liability issues, as well as PGE’s damages, includingattorneys’ fees and costs.

Grant Township is represented on a pro bono basis byCommunity Environmental Legal Defense Fund (CELDF).CELDF has sought to convince communities across the countryto enact self-styled community bill of rights ordinances that aredesigned to stop activities such as oil and gas extraction andmanagement of wastes from those activities. As in the PGE v.Grant Township case, CELDF has urged courts to modify oreliminate well-established legal principles. The Western Districtof Pennsylvania rejected CELDF’s effort on the basis of decades-

long precedent. With respect to the remaining issues of damages,attorneys’ fees and costs, CELDF will again face century-oldlegal precedent interpreting and applying constitutional rightsunder the Supremacy Clause and the First and FourteenthAmendments to the United States Constitution. In this regard, theUnited States Supreme Court has long held that corporations aredeemed to be “natural persons” under the United StatesConstitution with the same constitutional rights as individuals. ■

If you have questions regarding this decision, please contactKevin J. Garber (412-394-5404 or [email protected]),James V. Corbelli (412-394-5649, [email protected])or Alana E. Fortna (412-773-8702, [email protected]).

The way we see it, the Community Environmental LegalDefense Foundation (CELDF) is playing a con game withthe citizens of our Commonwealth and other states across

the nation, painting legitimate businesses as villains, makingpromises that can’t be delivered and then potentially leavingcommunities with large liabilities. PIOGA became involved asan intervener in the Grant Township case involving membercompany Pennsylvania General Energy to try to put a stop to thenonsense.

As the accompanying article (and an article on page 1 of theJanuary 2015 PIOGA Press) make clear, the so-called communi-ty bill of rights ordinances championed by CELDF impermissi-

bly strip corporations of all rights granted to “persons” understate and federal constitutions and prohibit corporations fromchallenging the validity of the ordinance, bestow personal“rights” on natural communities and ecosystems, and invalidatestate and federal government permits and laws inconsistent withthe ordinance.

Part of CELDF’s sales pitch to communities includes an offerof free legal services if the ordinance is challenged. But we won-der if the foundation mentions that its ordinances have never sur-vived a serious legal challenge or that losing a case can haveserious consequences when the plaintiff seeks damages andrecovery of legal costs. That happened in Mora County, New

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February 2014 Page 9November 2015 Page 9

Mexico, and PGE has asked the District Court involved in theGrant Township case to ultimately award damages and attorneys’fees. In the Elk County community of Highland Township,where PIOGA member Seneca Resources is challenging one ofCELDF’s ordinances, some residents and officials have publical-ly expressed concern that a loss could bankrupt the township.

“We are concerned with the unlawful

disruption of legitimate business operations

of our members in Pennsylvania by the

ordinances.”

As PIOGA General Counsel Kevin Moody explains, “We areconcerned with the unlawful disruption of legitimate businessoperations of our members in Pennsylvania by the ordinancesand also with the proliferation of these ordinances all over thecountry, because that helps give CELDF and the ordinances pub-licity —which CELDF appears to welcome to help advance itscause for constitutional change, which is what is necessary toestablish its asserted right to local self-government. CELDF’scontinued efforts, and municipalities’ willingness to even consid-er these ordinances and to adopt them, in the face of all adversejudicial decisions shows that CELDF is not stopping. We are try-ing to get as many definitive judicial decisions in Pennsylvaniaas we can, even though the primary effect of the decisions so farseems to be even more notoriety for CELDF’s ineffective tactic,not deterrence.”

Additionally, the Department of Environmental Protection,which had originally issued a permit for PGE’s conversion of thewell from production to disposal, withdrew the permit earlier thisyear to consider additional factors and then suspended its reviewpending the outcome of the Grant Township case. We disagreedthat that action and the precedent it sets, but the District Courtruling should remove the obstacle to DEP’s issuing the permit.

Despite this significant win, the case is not over. GrantTownship has filed for reconsideration, asking the court for adecision on whether the people of the townships have the consti-tutional right to local self-government that the ordinance relieson for its validity or, alternatively, whether the PennsylvaniaConstitution’s Environmental Rights Amendment provides theconstitutional right to local self-government necessary to author-ize the ordinance.

PIOGA’s intervention complaint asserts there is no such con-stitutional right to local self-government. PIOGA also has filed arequest for correction and amendment concerning the judge’s

reason for not ruling on PGE’s Oil and Gas Act preemptionclaim. The motion asks the court to correct the s erroneous state-ment in its decision that the Oil and Gas Act preemption provi-sion of Act 13 (Section 3302) was declared unconstitutional bythe Pennsylvania Commonwealth Court as part of its decisionon remand in the Robinson Township Act 13 case.

Another twist came with the November 3 general election,when Grant Township voters approved a home rule charter thatincludes the same ban on “the depositing, disposal, storage, ben-eficial use, treatment, recycling, injection, or introduction ofmaterials including, but not limited to, brine, ‘produced water,’‘frack water,’ tailings, flowback, or any other waste or by-prod-uct of oil and gas extraction, by any means” as the ordinance thatwas ruled to be unconstitutional. The adoption of home rulecould mean it takes a little longer to resolve the case, but theend result will be the same according to PIOGA GeneralCounsel Moody.

“Contrary to what a lot of people believe, just because amunicipality declares itself home rule, that doesn’t mean it’s itsown little country with its own constitution. It still can’t violatethe U.S. Constitution or the Pennsylvania Constitution,” Moodytold The Pittsburgh Business Times. “The same constitutionalprovisions invalidate the home rule charter the same as they dothe ordinance, and CELDF should know this. CELDF needs con-stitutional change, but misusing these local communities, ordi-nances and home rule charters is not a proper way to try to getit.” ■

Venango Machinery Equipment & Appraisals, LLC Robert Hileman CSA, EAANA 453 Moody Run Road Oil City, PA 16301 Ph: (814) 758-0062 FX: (814) 677-4119 [email protected] www.venangoequipment.com Specialize in Machinery & Equipment Appraisals with over 25 years of experience. Our Specialty is Oil & Gas Field Equipment which includes all types of Drilling Rigs, Service Rigs, Land Rigs, and their related Support Equipment &Tooling, Construction Equipment, Transportation Equipment & Manufacturing Machinery & Equipment. We provide Certified Appraisals in accordance with USPAP (Uniform Standards of Professional Appraisal Practice) and The Appraisal Ethics Commission for financing, lines of credit, Acquisitions & mergers, estate planning, insurance, and tax purposes. Member of EAANA Equipment Appraisers Association of North America) & ASA (American Society of Appraisers).

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Page 10: The PIOGA Press - November 2015 issue

Page 10 The PIOGA Press

For more information, visit vorys.com/shale.

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We have been instrumental in developing the statutory and regulatory initiatives that benefit

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Page 11: The PIOGA Press - November 2015 issue

February 2014 Page 11November 2015 Page 11

PIOGA Buyers’ Guide is LIVE!

PIOGA is pleased to announce that our new exclusiveBuyers’ Guide is live on the website, www.pioga.org!When we announced the partnership in late spring with

Strategic Value Media (SVM) to create this interactive “one-stop-shop” for our members looking for products and services neededfor oil and gas operations, we received many positive commentsabout this resource now available to PIOGA members.

The 2015 version of the Buyers’ Guide features updated andexpanded company and product listings, in addition to othervaluable information relating to the industry. PIOGA membersand other visitors to our website now have an efficient way tobrowse for goods and services.

“We’re pleased to offer such a needed resource, which willgreatly assist industry professionals in making educated purchas-ing decisions throughout the year,” said Lou D’Amico, PIOGA’sPresident and Executive Director.

Partnering with SVM has allowed PIOGA to provide more

options to our members to advertise their products and services.All PIOGA Service Provider and Professional Firm membersautomatically receive a free listing in the Buyers’ Guide, but youcan work with the SVM staff to discuss options of upgradingyour listing in the Buyers’ Guide. There are many options thatthe SVM can discuss with you as you determine how much youwould like to advertise. Additionally, there are new categoriesand subcategories under which you can list your company (seecategory list below).

Service Providers/Professional Firms: Please take a minuteto review your Buyers’ Guide listing. If you would like torequest changes or to upgrade your listing, please email [email protected].

If your company or business has not yet taken advantage ofthis exceptional opportunity to highlight your products and serv-ices, it is not too late. To learn more about advertising your prod-ucts or services in this exclusive our exclusive Buyers’ Guide,please email [email protected]. PIOGA receives ashare of all advertising proceeds from this collaboration. ■

AerialInspectionSurveyingUnmanned Aerial Systems / Services

Architects/EngineersArchitect/EngineerEngineering ServicesFacility Design / ConstructSurveying

ConstructionCompressor & Machinery GroutingCompressor BuildingsConcreteDisposalElectrical & PlumbingElectrical ContractorEnvironmental ConstructionExcavatingFence InstallationGeneral Contractor / Design Build

Contractor / Bridge ContractorGroutingLand, Leasing, R/W & AcquisitionMarine ConstructionMechanical & Industrial ConstructionOilfield Construction / ContractorsPile DrivingPipeline ConstructionRoad Construction / Repair

ConsultingConsultantsConsulting – General Oil FieldConsulting – Reserves and Economics

DrillingDirectional DrillingDrilling ContractorsDrilling RigsDrilling ServicesDrilling Supplies

Education/TrainingEquipment & Supplies

Above Ground Storage (AST Tanks)BackUP WrenchesChemical SuppliesCoatings & LiningsCompressor Buildings / ConcreteCompressorsConcreteElectrical SupplyEnvironmental ProductsEquipment Rental / RepairsEquipment Supply / Manufacturer

Flange SplittersForkliftsFrac TanksFuel/LubricantsGenerator Sales / Rental / ServiceHoist & CraneHose & FittingsHydraulic and Pneumatic Torque

WrenchesHydraulic Components & Sealing

DevicesHydraulic Fracturing Equipment Repair

toolsInsulationLimestone SupplierLiners & MatsMachine and FabricationMaterial HandlingPackagingPipe, Valves & FittingsPolymers/PlasticsPump JacksSecondary ContainmentSupply CompaniesTank Farm LinersTruck Equipment and ServiceVac MachinesVapor Recovery SpecialistWell Pad Liners / Service

Equipment SalesAir CompressorsGenerator Sales/Rental/ServiceMeter Calibration, Sales, Repair &

InstallationMeter SalesPE Fusion EquipmentPipe, Valve and Fitting SalesProduction Equipment Sales & ServicePumps / NGL PumpsTank Manufacturers and SalesTruck Equipment and ServiceVapor Recovery SpecialistWater Pumps

ExplorationSeismic

Fairs and FestivalsFinancial Services

AccountingBankingEconomic DevelopmentInsuranceInvestment

Payroll ServicesRevenue DistributionTax Preparation

GasGas AnalyticalGas CompressorsGas Field Equipment RepairGas MeasurementGas ProcessingGas Transmission / DistributionMeter Calibration, Sales, Repair &

InstallationMidstream GatheringNatural Gas AnalysisNatural Gas Marketing

HotelsIT/Software

Data ProcessingServiceSoftware DevelopmentSoftware Sales

LandGeological & Geophysical ServicesGIS/GPS Data CollectionLandProfessional Hand Tree Planting

Legal ServicesAcquisitions, Mergers and DispositionsAttorneyCorporate LawDue DiligenceEnvironmental LawLabor/Employment LawLitigationOil and GasSafety and Health LawTitle Work and ExaminationWorkers’ Comp Law

MembershipProducers – Exploration, Production &

DevelopmentProfessional Services

AppraisalsAuctioneerBrine Hauling & DisposalClothing/UniformsCoal Industry MaintenanceCommercial Real EstateCommunicationCompletionsConfidential Document ShreddingContract Operating

Cultural Resources ServicesEnergy Management ServicesEnvironmental ServicesFire ProtectionFrac Sand & WastewaterFracturing SystemsGolf ClubJanitorial ServicesLaboratory Testing / Analytical ServicesLand ServicesMarketing/AdvertisingMidstream PipelineNDT/InspectionOil & Gas NewsOilfield ProductsOilfield ServicesPressure TestingProfessional ServicesPublic Relations / Trade Show SupportRefiningSafety and Risk ManagementSecurityService CompaniesStaffing/RecruitmentTanks & Tank ServicesWater ManagementWebsite Design / Computer SupportWell Services

Reclamation ProductsAgronomyErosion & Sediment ControlSite Specific Solutions for VegetationSoil TestingWater Treatment

RegulatoryRegulatory ComplianceRegulatory Compliance PermittingRegulatory Compliance SoftwareSecondary ContainmentVapor Recovery Specialist

Remote Asset MonitoringSafety SuppliesTransportation

Crude Oil Buyer and TransporterDiesel Engine Sales, Service, Parts &

WarrantyOilfield TruckingTruck Equipment and ServiceTrucking ServicesVehicle Repair, Rental, SalesWater TransferWireline and Logging Services

Buyers’ Guide categories

Page 12: The PIOGA Press - November 2015 issue

Page 12 The PIOGA Press

Court upholds zoning ordinancepermitting oil and gas welldevelopment in agricultural/residential zoning district

On October 21, Judge Richard McCormick, PresidentJudge of the Westmoreland County Court of CommonPleas, issued a decision and order upholding the validity

of Allegheny Township’s zoning ordinance which permits oil andgas well development in the township’s R2Agricultural/Residential Zoning District. The decision inFrederick v. Allegheny Township Zoning Hearing Board, No.1898 of 2015 (Com. Pl. Westmoreland Co. Oct. 21, 2015),affirms a previous decision of the township’s zoning hearingboard. Babst Calland represented CNX Gas Company LLC, anintervenor in the case, before both the common pleas court andthe zoning hearing board.

BackgroundCNX applied for and received a zoning compliance permit to

develop an unconventional gas well pad in the township’s R2District, in which oil and gas well development is permitted as ause by right. Neighboring property owners appealed to the zon-ing hearing board, challenging both the issuance of the permitand the validity of the township’s zoning ordinance, alleging thatpermitting oil and gas well development in the R2 District violat-ed the Pennsylvania Supreme Court’s plurality decision inRobinson Township v. Commonwealth of Pennsylvania. Robinsonwas the case that invalidated the mandatory zoning provisions ofAct 13. Under Pennsylvania law, zoning ordinances are pre-sumed to be valid and objectors have a high burden in provinginvalidity. The objectors attempted to present a college professoras an expert witness regarding hydraulic fracturing, but the zon-ing hearing board rejected the professor as an expert because hehad no formal training in hydrology or petroleum engineering.He had also never visited the proposed location of the well. Alandscape architect presented by objectors as an expert witnesson the appropriate zoning of oil and gas development was reject-ed by the zoning hearing board as an expert because he hadnever visited an oil or gas well site, had no professional experi-ence with oil and gas operations or comprehensive zoning ordi-nances, had no knowledge of the state permitting requirementsfor oil and gas operations, and had not visited AlleghenyTownship since 2007.

CNX presented testimony outlining the comprehensive stateregulatory regime over oil and gas operations by thePennsylvania Department of Environmental Protection (DEP).CNX also established through information from the DEP andGIS mapping that there were more than 200 existing oil or gaswells in Allegheny Township, most of which were in the R2District, and established that about 75 percent of the land mass inthe R2 District was leased to oil and gas operators. CNX alsoestablished by expert testimony from Ross Pifer of Penn StateUniversity’s School of Law that oil and gas operations wereextremely common in the agricultural communities inPennsylvania and that at least 55 municipalities in Pennsylvaniahad zoning ordinances similar to the one in Allegheny Township

that permitted oil and gas operations in anagricultural district, and that such usescould co-exist. Professor Pifer also notedthat the Pennsylvania Farmland and ForestLand Assessment Act (also known as“Clean and Green”) and the AgriculturalArea Security Law, both of which provideprotections and benefits to farmland toensure that such land is preserved for futureagricultural uses, specifically allow oil andgas operations.

Following several nights of hearings andoral argument, the zoning hearing boardruled that the zoning ordinance was validand upheld the issuance of the zoning com-pliance permit. Objectors then appealed toCommon Pleas Court.

Appeal to the Court of Common PleasIn Frederick, Judge McCormick first

observed that Robinson was not bindingprecedent because it was only aplurality decision. The court alsopointed out that Robinson did notaddress the constitutionality of alocal ordinance, but instead involved a statute of statewide appli-cation (Act 13) that was invalidated because it interfered with theright of municipalities to make local zoning determinations. Inany event, the court went on to conclude that the AlleghenyTownship zoning ordinance was consistent with the Robinsonplurality. Significantly, citing the extensive record developedbefore the zoning hearing board, Judge McCormick expresslyrejected the objectors’ contention that the zoning ordinance’sauthorization of oil and gas uses “is inconsistent with the agri-cultural and residential character of the township.” That recordestablished that (1) there was a long history of oil and gas devel-opment in the township, including a number of wells and apipeline in close proximity of the objectors’ properties, (2) in theR2 District approximately 75 percent of the land mass is leasedto oil and gas operators, (3) having the well pad on his propertyenabled the surface owner to continue actively farming his prop-erty instead of developing it for a residential subdivision, and (4)permitting oil and gas operations in the R2 District enhances thetownship’s ability to maintain its rural character. The court alsocited to expert testimony which concluded that oil and gas opera-tions have safely coexisted within rural communities throughoutthe Commonwealth.

Judge McCormick also rejected several of the objectors’ relat-ed arguments. Specifically, the court ruled that the township zon-ing ordinance did not constitute illegal “spot” zoning and did notviolate sections 604 and 605 of the Pennsylvania MunicipalitiesPlanning Code. In so concluding, the court stated that the town-ship’s “legislative body sought to further the general welfare ofits citizens by permitting them to benefit economically from oiland gas resources and royalties, and enabling them to retain theagricultural use and rural setting of their land.” Finally, the courtfound that the authorization of oil and gas development did notviolate the community development objectives of the townshipzoning ordinance.

Blaine A. Lucas

Lawrence H.Baumiller

Authors:

Page 13: The PIOGA Press - November 2015 issue

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Page 14: The PIOGA Press - November 2015 issue

Page 14 The PIOGA Press

Energy andNatural Resources

Page 15: The PIOGA Press - November 2015 issue

November 2015 Page 15

Other pending ordinance challengesWhile Frederick is the first Robinson-based validity challenge

to be decided on appeal in a Court of Common Pleas, there are anumber of currently pending ordinance challenges in municipali-ties that permit oil and gas development. In these ordinance chal-lenges, objectors essentially argue that the ordinances are invalidbecause they are not strict enough because either the ordinancespermit oil and gas operations outside of an industrial zoning dis-trict or because the ordinances were enacted without performingexhaustive due diligence with regard to potential environmentalimpacts. In most of these cases, the objectors have asserted thatthe zoning ordinance violated the Pennsylvania EnvironmentalRights Amendment (as interpreted by the Robinson plurality)because it permitted oil and gas development, a use they charac-terize as “industrial,” in agricultural, residential and other non-industrial districts.

In Pulaski Township, Lawrence County, the Pulaski ZoningHearing Board unanimously denied an ordinance validity chal-lenge brought by objectors to oil and gas operations on April 20,2015. The matter was subsequently appealed to the LawrenceCounty Court of Common Pleas. In Robinson Township,Washington County, two separate ordinance validity challengeswere denied on standing, ripeness and other procedural groundsby the Robinson Zoning Hearing Board on January 6, 2015. Theobjectors have appealed to the Washington County Court ofCommon Pleas. Finally, in Middlesex Township, Butler County,an ordinance validity challenge brought by objectors to theplacement of an unconventional gas well pad wad dismissed bythe Middlesex Zoning Hearing Board on May 28, 2015. Thematter has been appealed to the Butler County Court of CommonPleas. The judge granted a motion by the objectors to forestallconstruction of the gas well pad, but required them to post asurety bond of $250,000. Additionally, an ordinance challengewas brought in New Sewickley Township, Beaver County, butwas withdrawn by the objectors after one disastrous hearing.Counsel for the objectors was also involved in the Robinson liti-gation.

Significance of FrederickFrederick is significant in that it is the first case in which a

court has addressed a Robinson-based ordinance validity chal-lenge. This case is precedential in Westmoreland County and isinstructive to courts in the other counties of the Commonwealthwhere similar ordinance challenges are pending or will arise.While at the time of this writing Frederick is so new that theappeal period has yet to run out, the case shows a clear indica-tion of continuing with the established law that zoning ordi-nances are presumed to be valid and that objectors have a highburden of proving otherwise and must present substantial evi-dence. ■

If you have questions regarding this decision, please contactBlaine A. Lucas (412-394-5657 or [email protected]),Steven B. Silverman (412-253-8818, ssilverman@babst -calland.com) or Lawrence H. Baumiller (412-394-5490,[email protected]).

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Page 16: The PIOGA Press - November 2015 issue

Page 16 The PIOGA Press

Chapter 78 regs moving forward without advisory panel endorsements

The Department of Environmental Protection apparentlywill advance its Chapter 78 rulemaking on to theEnvironmental Quality Board (EQB) for final action even

though neither of the agency’s oil and gas advisory panelsendorsed the rule changes.

The proposed Chapter 78, Subchapter C rules govern oil andgas surface operations and have been in the works for more thanfour years. Per a legislative directive last year, DEP has split therules into Chapter 78 for conventional oil and gas and Chapter78a for unconventional operations. PIOGA and other industrygroups have strong objections not only to the proposed rulesthemselves, but also the process DEP has followed (June PIOGAPress, page 1).

DEP’s Oil and Gas Technical Advisory Board (TAB) wasasked to sign off on both Chapter 78 and 78a at its October 27meeting, but the board adopted a resolution declining to do so.Under the Wolf administration, DEP re-tasked TAB to focusalmost exclusively on matters related to unconventional develop-ment and created the Conventional Oil and Gas AdvisoryCommittee (COGAC) to provide input on conventional oil andgas. While COGAC is a creature of DEP and has no real authori-ty, TAB was established under the Oil and Gas Act and given theduty of reviewing and commenting on regulations of a technicalnature to be submitted to the EQB, the body that formally putsforth and adopts DEP regulations.

With DEP spending only a token amount of time briefingTAB on the conventional side of the regulations in recent

months, members were not comfortable voting on the Chapter 78proposal without input from COGAC. As a result, the resolutionTAB approved on October 27 indicated the board would put offproviding feedback on both Chapter 78 and 78a until it couldincorporate comments from COGAC.

COGAC responseWhen COGAC met on October 29, members approved a five-

page resolution detailing their concerns about the regulations andthat DEP has not conducted the rulemaking according to statelaw. The resolution says the rulemaking process should berestarted in its entirety or suspended until DEP adequatelyaddresses the committee’s concerns. Among COGAC’s objec-tions:

• DEP has not provided the data necessary under theRegulatory Review act to justify such sweeping changes to itsregulations. The committee itself contends the proposed changesare unnecessary and inappropriate.

• The department has not provided financial analysis data fora vast amount of the regulations. Moreover, the costs that DEPdid attribute apply only to new well development and not thecosts of bringing approximately 100,000 existing wells into com-pliance, or ongoing compliance costs.

• DEP did not provide the mandatory regulatory flexibilityanalysis that is to consider methods of reducing impacts of regu-lations on small businesses.

• The Regulatory Review act requires the agency to providecopies of the forms that will be called for under the new rules,but DEP has failed to do so.

• The department has repeatedly issued modified versions ofan already complex set of proposed rules, and has not givenCOGAC adequate time to evaluate each set. The committee iden-tified a number of ambiguities in such provisions as area ofreview, site restoration and site specific plans that DEP has notprovided time to discuss.

• DEP has not complied with Act 126 of 2014, which requiresthe agency to “promulgate proposed regulations under 58 Pa.C.S. (relating to oil and gas) or other laws of thisCommonwealth relating to conventional oil and gas wells sepa-rately from proposed regulations relating to unconventional gaswells.” Instead, DEP simply divided the proposed regulationsinto two parts in the middle of the rulemaking process.

Moving aheadDEP has made it clear that it plans to move the regulations

forward in their current form, even without the support of theadvisory groups. Following the October 27 TAB meeting, ScottPerry, the department’s deputy secretary for oil and gas manage-ment, was quoted by the Pittsburgh Post-Gazette as saying,“While not the ringing endorsement we had hoped for, we’repleased nonetheless that it was certainly not a vote to disapprovethe rules.”

The department is expected to send the rules package on toEQB by early next year and hopes to secure final approval soonafterward. A copy of the rules dated October 27—which are saidto be very close to what DEP will ask the EQB to approve—canbe found on both the TAB and EQB pages of the department’swebsite, www.dep.state.pa.us. ■

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Page 18 The PIOGA Press

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Page 19: The PIOGA Press - November 2015 issue

February 2014 Page 19November 2015 Page 19

Can pipeline insurance help inthe conversion of coal-firedpower plants?By Adrianne ViguerasVice President, Energy DivisionECBM

There are approximately 557 coal-fired power plants in theU.S. In Pennsylvania alone there are 40. Throughout theyears, coal was the “go to” fuel source for about 44 per-

cent of the electric power in this country. Now, new EPA regula-tions will make it necessary to move power generation in a dif-ferent direction. These old coal-fired power plants are not neces-sarily shutting down; many of the facilities will be repoweringwith other fuel sources.

Some of the older and smaller coal-fired plants will be deacti-vated by 2016. Their replacement or conversion to another fuelsource will be too expensive to undertake. Others will contem-plate the options, but with the abundance of natural gas nowavailable in the U.S., this is a likely alternative.

Supply concerns for plants converting from coal to gasOne of the concerns coal-fired plants have regarding conver-

sion to gas is that in the past they had a pile of coal outside theirfacility that was both visible and calculable. Now with a gaspipeline as their only means of power, they have to rely on some-thing unseen. If, for instance, there was some type of accidentand the pipeline is compromised, they would be unable to pro-vide electric power due to the suspension of the delivery of gas.

Who would compensate them for the business interruption asa result of this non-delivery scenario? Even if there is a backupplan, there will still be some down time. If there was an accidentat the connection on-site, how would they be compensated forthe release and any damage it may do, including environmentalimpact? All of these are valid concerns of power plants convert-ing to alternative energies.

A more secure futureRecently there was a new offering from the insurance industry

that may do the trick—a pipeline warranty policy that works out-side of the traditional insurance box.

This insurance product does not need a third party to bring aclaim against you for coverage to be accessed. The intention ofthe policy is to cover newer pipelines carrying gas, steam or coldwater located in the United States. In the event of a failure in thepipeline caused by anything from wear and tear to accidentalpuncture, the owner/operator will be responsible for the repair orreplacement of that section of pipe. This policy will over thecosts of the repair or replacement above deductibles.

Meeting the needs of businesses and communitiesWith this insurance product it will not be necessary for a third

party to report the break and file a claim against the owner/oper-ator. By virtue of the fact that it happened, the claim can bereported. If the release causes an environmental incident includ-ing natural resource damage, the policy will respond.

There is business interruption coverage for the end userincluding an electric power plant.

Because it can cover the lateral lines necessary to bring natu-ral gas to electric power plants, the philosophy of responsibilityin insurance can help achieve the ultimate goal- of convertingcoal power to other alternative fuels.

The goal is to make coal-fired plants comfortable with thetransition. This product can assure the power plant that in theevent of an accident, there will be someone to pay for the repairor replacement. This includes damage to the area, including envi-ronmental. Business owners can be assured that they can stay inbusiness with interruption coverage.

So, insurance, in this case, can help with the conversion ofcoal-fired power plants to alternative fuels. ■

Page 20: The PIOGA Press - November 2015 issue

Page 20 The PIOGA Press

Back in June, PIOGA launched our new “Members Only”website powered by Yourmembership.com. The newinternal website offers PIOGA members many benefits

that we hope you’re taking advantage of. Being a member ofPIOGA means many things, including getting exclusive access toall the resources that the association offers through our members-only website.

PIOGA currently has over 2,500 individual member companycontacts within our database and there are still over 1,500 indi-viduals who haven’t logged in to their account yet. It’s easy andfast to log in to your account! Just go to www.pioga.org >Members Only link (top right of website) and input your user-name (usually your email address) and your password. If youdon’t remember your password (or the temporary one you weresent in June), just click “Reset my password” and an email willbe sent so you can choose another passcode.

Once you’re into the Members Only site, you will now haveaccess to many resources available including:

• Ability to update your own membership profile.• Company main contacts can add/delete company contacts

(employees) from their account.• Membership renewal and online dues payment options.• Committee portal pages for members to easily access com-

mittee news and resource documents.• Membership and Buyers’ Guide directories. • Online event registration. • Surveys.• Communication e-blasts and online newsletter capabilities.

• Job and resume boards.• Advocacy/resource page.• Energy education resource page.• Forums and blog options.Log in today and take advantage of this valuable resource for

our members! If you have any questions or issues accessing youraccount, contact Danielle Boston at [email protected].

Has your membership expired? Did you receive an email alert from PIOGA informing you

that your yearly dues were up for renewal? Main company con-tacts will now receive an email alert 30 days prior to the expira-tion of their yearly membership expiration date. The email willcontain a link to renew your membership online.

The online renewal process allows you to confirm your mem-bership category and select your preferred payment option,including credit card payment (this option available only for pay-ments below $2,500), request an invoice to be sent or indicate acheck will be mailed. Once this is submitted to PIOGA and pay-ment is received, your membership will be renewed!

You will also receive an email notification on the last day ofyour membership. If your membership does expire, you/yourcompany will lose access to the “Members Only” area and youwill no longer receive email correspondence (such as theeWeekly, event announcements, etc.) and you will not be eligiblefor discounted PIOGA rates for events.

Don’t let your membership expire! Renew your membershipon time and you won’t miss out on anything! Thank you for your

Are you taking advantage of the PIOGA ‘Members Only’ website?

Page 21: The PIOGA Press - November 2015 issue

February 2014 Page 21November 2015 Page 21

continued support of PIOGA. If you have ques-tions regarding your membership, contactPIOGA’s Director of Membership and FinanceDebbie Oyler at [email protected]. ■

PIOGA questions authoritybehind PNDI receipt fee

While PIOGA appreciates the improve-ments made by the Department ofConservation and Natural Resources

to the Pennsylvania Conservation Explorer—thesoon-to-be-released tool for conductingPennsylvania Natural Diversity Inventory(PNDI) searches as part of project planning andpermitting—the association questions DCNR’sauthority to impose a fee for PNDI receipts.

DCNR on September 19 published a notice ofinterim final policy to impose a $40 fee on usersof the system who receive final PNDI receipts.Prior to this, there has been no change forreceipts. PNDI information has been providedfree of charge since the program’s inception in1982 and since online access to the PNDI toolbegan in 2004.

The department previewed the new Pennsyl -vania Conservation Explorer prior to PIOGA’sSeptember 29 annual meeting and explained thatwhile access to the system is free, there will be acharge of $40 if a PNDI receipt is generated (October PIOGAPress, page 16).

In formal comments in response to the September 19 notice,PIOGA did not contest the amount of the fee, but objected to theimposition of regulatory requirements through policy statements.

DCNR stated that it is imposing the fee because costs for thePennsylvania Natural Heritage Program (PNHP) have increased,while funding has decreased to support the program’s work andthere is no dedicated funding stream. The department citesSection 305 of the Conservation and Natural Resources Act,which the agency says “grants DCNR authority to inventory andsurvey the ecological resources of the Commonwealth and makethe resulting information available in a form convenient for refer-ence.”

But PIOGA counters that nothing in Section 305 authorizesthe department to impose a fee—either specifically or by neces-sary implication—for use of the information generated by thesurvey. PIOGA suggests that the department look to its appropri-ations to fund the PNHP rather than mandating a fee on certainusers of the Pennsylvania Conservation Explorer. ■

The shale revolution and petrochemicals. For the petrochemical industry,unconventional oil and gas development has been “an absolute gamechanger,” Melissa Hockstad (pictured above at right) of American Fuel &Petrochemical Manufacturers (AFPM) told members of PIOGA’s Pipelineand Gas Market Development Committee at their November 5 meeting. AFPMis a national trade association whose 400 members represent 98 percent ofU.S. refining capacity and petrochemical manufacturing. Hockstad said thatas the largest industrial user of natural gas, the chemical industry has benefit-ted dramatically from the abundant supply and low price of gas.

“PA Independent Oil and Gas Association”

Page 22: The PIOGA Press - November 2015 issue

Page 22 The PIOGA Press

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Thompson introduces bill protecting private mineral rights in Allegheny National Forest

Pennsylvania Congressman Glenn “GT” Thompson onNovember 3 introduced H.R. 3881 , the “CooperativeManagement of Mineral Rights Act of 2015,” which will

prohibit the U.S. Forest Service from creating rules to limitaccess to privately held mineral rights, within the AlleghenyNational Forest (ANF).

“Our region was built on oil, natural gas and other resourcesproduced on private property,” Thompson said. “Despite genera-tions of a balanced and stringent environmental review process,extreme environmental groups had several unsuccessful attemptsat shutting down production in the Allegheny through frivolouslitigation. Thankfully, federal courts saw through those efforts,yet our region needs further certainty moving forward.

“The Cooperative Management of Mineral Rights Act of 2015will ensure responsible production can occur without impedi-ment. This legislation will provide clarity to the regulatoryprocess and continue to respect the long-standing recognition ofthe fundamental importance of protecting private propertyrights.”

The bill repeals a section of the Energy Policy Act of 1992and a corresponding section in Title 30 of the United States Codethat outline advance notice that owners of private mineral rightsin the national forest must provide before beginning surface dis-turbance activities related to oil and gas. The notice is to includea designated field representative; a map showing all well sites,access roads and pipelines; a plan that includes the schedule forconstruction and drilling; and erosion and sedimentation controlplan; and proof of subsurface ownership.

The Allegheny National Forest, established in 1923, coversmore than 500,000 acres and is located in Elk, Forest, McKeanand Warren counties. Ninety-three percent of the ANF’s subsur-face is privately owned. PIOGA saw to fruition the legal actionmentioned by Congressman Thompson, defeating attempts bypreservationist groups and the Forest Service to halt lawful oiland gas activity in the ANF. ■

Little-known DEP office starting tolook at oil and gas activity

Heard of the Department of Environmental Protection’sOffice of the Environmental Advocate? If not, you’rehardly alone. The little-known DEP section was estab-

lished in 2002 as a resource for residents in low-income areasand with high minority populations to help them address envi-ronmental issues.

A page on DEP’s website detailing the history of the officelists essentially one accomplishment: “With the creation of theEnvironmental Justice Public Participation Policy in 2004, resi-dents in environmental justice communities were grantedenhanced public participation opportunities during the depart-ment’s permitting process with certain major permit applications,in addition to the normal course of public involvement. The poli-cy grants EJ communities the opportunity of an informationalpublic meeting, a plain language summary of the proposed appli-cation, increased outreach and access to information on permitapplications, and the intervention of an advocate to facilitatecommunication between the industry, DEP and the community.”

An environmental justice area, according to DEP’s website, isa place in any census tract where 20 percent or more individualslive in poverty and/or 30 percent or more of the population isminority.

DEP Secretary John Quigley told the Harrisburg Patriot-Newsthat when he came to the agency at the beginning of the year thethree-person Office of Environmental Advocate had just one staffmember, who retired not long afterward. Quigley decided theoffice needed a makeover and christened it the Office ofEnvironmental Justice, putting a director on the payroll justbefore a state budget-related hiring freeze took effect.

As part of the office’s reinvention, it will review oil and gaspermits and add any to a so-called “trigger list” that are locatedin the 851 designated environmental justice communitiesthroughout the state. The list will prompt DEP to provide moreinformation to poor and minority communities, while also givingthem opportunities to be heard, the newspaper reported. About 5percent of the Commonwealth’s unconventional wells have beendrilled in such communities.

The Patriot-News also reported that the Office ofEnvironmental Justice will begin reviewing the health and envi-ronmental risks of shale-well development in poor and minoritycommunities. ■

Page 23: The PIOGA Press - November 2015 issue

February 2014 Page 23November 2015 Page 23

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Sixth Circuit stays WOTUS rule nationwide

The U.S. Court of Appeals for the Sixth Circuit on October9 stayed the rule redefining the scope of federal jurisdic-tion under the Clean Water Act (CWA) in the consolidated

multi-circuit challenge to the Environmental Protection Agency’s“Waters of the United States” (WOTUS) rule.

Remarkably, the Sixth Circuit stayed the rule nationwide inorder to preserve the long-time status quo understanding of CWAjurisdiction even while motions to dismiss on jurisdictionalgrounds are pending. The order grants the stay “pending determi-nation of our jurisdiction” under CWA section 509(b). Briefingon whether the WOTUS rule is an action subject to direct reviewby a court of appeals under CWA section 509(b) is underwaybefore the Sixth Circuit, and the court noted that the jurisdiction-al issue will be “ripe for decision in a matter of weeks.”

Even though the majority acknowledged the dissent’s concernthat the court should not issue a stay before confirming its juris-diction, the majority noted that it has “no doubt” of its authorityto issue orders to “preserve the existing conditions and the sub-ject of the petitions.” To that end, the majority clarified that “thestatus quo at issue is the pre-rule regime of federal-state collabo-ration that has been in place for several years.”

Rather than focus on whether there was imminent or irrepara-ble injury to petitioners or the environment, the Sixth Circuitfocused its rationale on the burden that would be borne nation-wide by governmental entities, private parties, and the public, bythe rule’s “effective redrawing of jurisdictional lines” and “thesheer breadth of the ripple effects caused by the rule’s definition-al changes.”

With that order, the Sixth Circuit becomes the second court toconclude that litigants challenging the WOTUS rule have demon-strated a likelihood of success on the merits of their claims. Thecourt questioned whether the WOTUS rule’s distance limitations“are harmonious with” Justice Kennedy’s concurrence inRapanos v. United States.

The court also indicated that the rulemaking process by whichthose distance limitations were adopted was “facially suspect”because the proposed rule did not include those distance limita-tions in defining “adjacent waters” or “significant nexus.”Moreover, the court noted that “respondents have failed to identi-fy anything in the record that would substantiate a finding thatthe public had reasonably specific notice that the distance-basedlimitations adopted in the rule were among the range of alterna-tives being considered.”

The decision and national stay beg the question of whetherthe stay will remain in effect if the Sixth Circuit determines ithas jurisdiction over the petitions. The stay could be short livedif the court determines that jurisdiction to review the WOTUSrule lies with the district courts, leaving only the 13-state prelim-inary injunction in place from the North Dakota federal court.

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Page 24: The PIOGA Press - November 2015 issue

Page 24 The PIOGA Press

Pennsylvania, Ohio, West Virginia inkcooperation agreement to maximizeeconomic growth in shale industry

Pennsylvania has entered into a three-year cooperationagreement with West Virginia and Ohio to collaborate onareas critical to maximizing economic growth in the shale

gas region. The agreement was unveiled October 13 at the Tri-State Shale Summit in Morgantown, West Virginia.

“We must work together to ensure our region has the skilledworkforce necessary to fill jobs and attract new employers,”Pennsylvania Governor Tom Wolf said in announcing the agree-ment. “The demand for workers by the energy industry and off-shoot industries, especially manufacturing, is high and still grow-ing. Here in Pennsylvania, I have proposed to expand invest-ments in education across the board and especially increasefunding for trusted and proven job training and workforce devel-opment initiatives.”

As part of the cooperation agreement, the three neighboringstates will discuss ways to cooperate in marketing efforts toattract new businesses, strengthen workforce development pro-grams, spur investments in expanding infrastructure and deliveryof natural gas and liquids, and encourage academic institutions toexpand and collaborate on research. ■

PIOGA Member News

Women in energy recognized

The Pittsburgh Business Times presented the inauguralWomen in Energy Leadership Awards, along with thethird annual Women in Natural Gas Awards in collabora-

tion with Shale Media Group, during an October 15 gala at theSouthpointe Golf Club. More than 30 women leaders in theregion’s energy sector were honored, including Joyce Turkaly,PIOGA’s director of natural gas market development.

Fourteen representatives from PIOGA member companiesreceived awards. They included:

• Amy Dobkin, Public and Government Affairs Advisor, XTOEnergy Inc.

• Stephanie Gill, Vice President, General Counsel andCorporate Secretary, Consol

• Elizabeth Gregg, President, Environmental ServiceLaboratories Inc.

• Julianne Heins, Director, Supply Chain, Seneca ResourcesCorp.

• Amye McDearmon, Marketing and CommunicationsManager, TekSolv

• Erin McDowell, Division Counsel - Marcellus Shale, RangeResources

• Leah Mistick, Project Manager/Environmental Scientist,Moody & Associates

• Mary Murrin, Social Investment Team Lead, Chevron Corp.• Lauren Parker, Principal, Civil & Environmental Consultants• Katie Smith, Marketing Coordinator, Halliburton

Amye McDearmon of TekSolv was among the PIOGA memberswho were honored.

Page 25: The PIOGA Press - November 2015 issue

November 2015 Page 25

PIOGA Profile: Introduce your company

Introduce your company and tell other members what youoffer to Pennsylvania’s oil and gas industry. The guidelinesfor making a PIOGA Member Profile submission are:• Include a brief history of your company. When and where

was it founded, and by whom? Is the company new to the oiland gas industry in general or to Pennsylvania?

• Describe the products and services you offer specificallyfor the oil and gas industry. Do you have a product in particu-lar that sets your company apart from the competition?

• If applicable, tell how the business been positively impact-ed by Pennsylvania’s oil and gas industry. Have you expand-ed, added employees or opened new locations?

• Include a website address and/or phone number.• Your submission may be a maximum of 400-450 words

and should be provided as a Word document. Use minimal for-matting—bold and italic fonts are OK, as are bulleted or num-bered lists. Your submission is subject to editing for length,clarity and appropriateness.

• Include your company logo or a photo. Images must behigh-resolution (300 dots/pixels per inch or higher) and in anycommon graphics format. Please include identifications for anypeople or products in a photo. Send image files separately, notembedded in your document.

Email material to Matt Benson at [email protected]. This is afree service to our member companies and publishing datesare at the discretion of PIOGA. If you have questions or wantto follow up on a submission, email Matt or call 814-778-2291.

• Christina Toras, Professor, California University ofPennsylvania

• Amy Veltri, President, NGE Environmental & GeotechnicalEngineering Solutions

• Lee Ann Wainwright, Policy, Government & Public AffairsRepresentative, Chevron Corp.

• Laural Ziemba, Director of Public Affairs, Range Resources

Blast booth renovated, productivity improves forCurry

With the goal of continually improving its painting process,Curry Supply Company completely renovated the blast andreclamation system in its paint facility with new state-of-the-artequipment and realized an increase in productivity and efficiencyas a result.

The benefits of the new blast reclamation system are many.First, the system is fully automatic, so it runs only when it needsto, saving electricity. Next, paint facility technicians do not haveto stop their work as frequently to load the storage tanks sincethe auger moves the blast material into the storage tanks inpreparation for usage as needed. The most significant benefit ofthe new reclamation system impacts the finished product. By bet-ter monitoring the useable and unusable blast material, the painttechnician can more closely monitor the depth of the blast pro-file. A consistent depth profile ensures the highest quality paintand tank lining adhesion.

Curry Supply is one of America’s largest manufacturers anddealers of commercial service vehicles including on- and offroad water trucks, mechanics trucks, service trucks, on- and off-

road fuel/lube trucks, vacuum trucks, winch trucks, dump trucks,and lube skids.

Lowanse joins KU Resources

KU Resources, Inc., a consulting firm that specializes in envi-ronmental management and site development engineering, hasnamed Logan Lowanse as environmental technician. His respon-sibilities include performing water and soil sampling, and ana-lyzing data from those samples.

Prior to joining KU Resources, Lowanse was a teacher’sassistant in the Chemistry Department at California University ofPennsylvania. He graduated summa cum laude from Cal U witha bachelor of science in environmental science and minored inchemistry.

EdgeMarc closes equity commitment

EdgeMarc Energy Holdings, LLC announces that it hadclosed on an incremental $300 million equity commitment bring-ing total equity commitments to over $750 million. Existinginvestors including funds managed by the Merchant BankingDivision of Goldman Sachs were joined by new investor OntarioTeachers’ Pension Plan through its private capital group.

EdgeMarc is a leading exploration and production companyfocused on the Marcellus and Utica shales with 35 employeesbased in Canonsburg. The company has acquired over 50,000 netacres across Monroe and Washington counties in Ohio andButler County in Pennsylvania and is actively drilling and pro-ducing natural gas and natural gas liquids in these areas. ■

Page 26: The PIOGA Press - November 2015 issue

Page 26 The PIOGA Press

PIOGA value: Continued from page 1

now than ever. • We continue to beat back a severance tax. Ever since Ed

Rendell was governor, we have fought off efforts to impose aseverance tax on natural gas. With Act 13 of 2012, we agreed toa local impact fee on unconventional wells, because the bulk ofthe revenue from this tax goes to local communities and not theblack hole that is Harrisburg. When the impact fee was imposed,it represented a tax of about 1.5 to 2 percent; at today’s prices,it’s more like 7 percent.

Our current governor is obsessed with a severance tax. Hisinaugural budget proposal included what would have been thenation’s highest such tax. When our friends in the GeneralAssembly sent Governor Wolf a budget without a severancetax—in fact, a budget that adequately funded public educationand state government without any tax increase—he vetoed thewhole thing. In October, as a way to try to break the budgetstalemate, the legislative leadership agreed to give the governoran up-or-down vote on the revenue package of his choice in theHouse of Representatives. Governor Wolf offered a slightlyreworked version of his severance tax, and nine Democratsjoined every Republican in voting it down.

Votes like that don’t happen on their own. PIOGA has beenworking closely with a coalition of business and industry inter-ests to hammer home the message that our industry is a very

important economic driver to the Commonwealth, that we doindeed pay our fair share of taxes and that now is the worst pos-sible time to consider imposing any new tax on natural gas pro-ducers. Is PIOGA membership worth the cost? Just ask yourselfwhether you could bear what could effectively be a new tax of15 percent, or even 4-5 percent on top of the impact fee/tax, as isbeing suggested by some senators. That’s the biggest battle wehave been fighting in the General Assembly, but there are others,and they would all increase the cost of doing business inPennsylvania.

• PIOGA’s Environmental Committee is your best friend. Ihave never seen such an impressive array of expertise gathered inone room than during a monthly meeting of our EnvironmentalCommittee. Better yet, they put all of that knowledge and experi-ence to work on an astounding variety of issues—from the stateDepartment of Environmental Protection’s notorious Chapter 78regulations and mechanical integrity testing, well plugging andTENORM initiatives to the state Department of Conservationand Natural Resources new State Forest Plan and state landsmoratorium to the U.S. Environmental Protection Agencymethane-control, WOTUS and Clean Power Plan proposals to theU.S. Fish and Wildlife Service species listings to the U.S. CoastGuard prohibited barging of “produced water” to PHMSA effortsto restructure gas pipeline safety rules—all of which would haveunnecessary and significant negative impacts on our operations.Committee members draft formal comments on behalf of ourindustry, work cooperatively with regulators to find middleground and identify issues when they are still far off on the hori-zon. All of these issues would be very difficult and costly forindividual members to address separately.

It’s too early to say how the Chapter 78 regulations will ulti-mately play out, but without the relentless involvement of theEnvironmental Committee, these onerous rules would have beenin place by now and costing our industry tens and hundreds ofmillions of dollars to comply. We are far from done fighting thisand the other regulatory messes on your behalf.

• Looking out for your rights. Our organization has a longhistory of successfully defending your legal rights in litigation. Ifit were not for a case that we took all the way to thePennsylvania Supreme Court, you would have been paying local,county and school taxes on your mineral holdings. And had wenot taken the lead in the Allegheny National Forest (ANF), oiland gas activity on private mineral holdings there would eithernot be occurring at all or would be subject to time-consumingand expensive environmental assessments. Guess where the vastmajority of the state’s crude oil drilling happens—in the fourcounties that make up the half-million-acre national forest. Notonly did PIOGA prevail in federal court against the ForestService and a cadre of preservationist groups, but this year wealso secured approximately a half-million dollars in reimburse-ment of our legal fees from the agency. A large part of thosefunds was divided proportionally among the companies thatfinancially supported PIOGA’s years-long legal fight in the ANF.And we were instrumental in having federal legislation just intro-duced to make sure the successful ANF litigation result is pro-tected in federal law.

PIOGA has been participating in other important litigation indefense of the industry—from the so-called Community Bill ofRights local ordinances designed to bar lawful oil and gas activi-ties to DEP’s insistence on trying to enforce “public resource”

Page 27: The PIOGA Press - November 2015 issue

November 2015 Page 27

protection provisions of Act 13 that were enjoined by theSupreme Court to the use of Oil and Gas Lease Fund money tohelp balance the budget to the implementation of the properimpact tax “stripper well” exemption to the protection of oil andgas leases in bankruptcy court. Again and again, we are savingyou money and championing your rights in ways that would bedifficult for individual members to do separately.

PIOGA also monitors Pennsylvania PUC matters—from Act127 pipeline safety issues to impact tax issues to PA One Callissues—and gets involved as necessary and appropriate, withouthaving to incur any additional expense as with some other areasof litigation.

• Growing the burner tip. A PIOGA board member recentlysaid that our industry has two big adversaries—government regu-lation and commodity prices. If you’ve read this far, you have ataste for how PIOGA is working for you on the governmentside—and, hopefully, the value of what we provide (if not, pricea few lawyers, lobbyists and PR firms). We also realize that theonly way out of our current market situation is to find moreburner tips for our natural gas. I believe PIOGA is makingexceptional strides here as well.

PIOGA is on the cutting edge of efforts to expand markets fornatural gas. To my knowledge, no other state association has aperson dedicated solely to market development. Joyce Turkalyworks closely with PIOGA’s Pipeline and Gas MarketDevelopment (PGMD) Committee as it tracks and supportspipeline expansion projects to help get Pennsylvania’s prodigiousnatural gas supplies to where they are needed.

Thanks to federal emissions rules, natural gas is becomingincreasingly important for electrical generation, representing ahuge market for us. Joyce and one of the PGMD subcommitteeshave been ironing out gas-electric coordination issues with PJMInterconnect, which operates the electrical grid in our region.When PJM has a question about natural gas, it turns to PIOGA.That’s not a small accomplishment.

Other PGMD subcommittees are addressing natural gas vehi-cles and infrastructure, manufacturing and other large volumeusers, and public relations in support of pipeline expansions andsimilar projects. As an example of what they have been doing,this month the PGMD’s Manufacturing and Large VolumeConsumer Subcommittee is bringing together PIOGA membersand the American Fuel and Petrochemical Manufacturers, a tradeassociation representing manufacturers of virtually the entireU.S. supply of gasoline, diesel, jet fuel, other fuels and homeheating oil, as well as the petrochemicals used as building blocksfor thousands of products. Again, it’s all about growing the mar-ket for what we produce as we initiate this new relationship.

For the conventional producer, PIOGA recently completed avery favorable renegotiation of the Peoples ProductionEnhancement Service (PES) program. Producers who participatein the PES program take advantage of special rates and in turnPeoples annually spends approximately $1.5 million on systemimprovements benefitting local producers and offers participantsreduced water vapor content requirements. With small producersin mind, this time last year we held a free, day-long program thatexplained why the market works as it does and how to cope inthese times of low commodity prices.

• Educating a new generation of energy-aware citizens. Werecognize that much of the opposition to our industry—first thecatchall of “fracking” and now pipeline projects—is due to a

lack of education about where oil and gas come from and theprocesses they go through to become indispensable parts of ourlives. To help counter the misinformation, we created the PIOGAEnergy Education Program, which educates teachers about ener-gy and provides them with a curriculum for their students. Todate, the program has reached an estimated 16,000 students andwe have received nothing but positive responses. Yes, it’s diffi-cult to put a price tag on the benefits of energy education—butwe all know the costs of having projects thwarted and onerousnew regulations imposed.

• But wait, there’s more! There is great value in many otherthings we do. For instance, this newsletter and our eWeekly elec-tronic newsletter, as well our programs that offer opportunitiesfor learning and networking. These services can help grow yourbusiness and enable you to do your job more effectively and effi-ciently. This year we unveiled a new online membership manage-ment system that allows you to better connect with other mem-bers and more easily take advantage of association services. Wealso recently implemented an online Buyers Guide that helps ourService Provider and Professional Firm members communicatethe products and services that they offer to the industry.

Can I tell you in dollars and cents how much your PIOGAmembership is worth? Of course not. I can tell you, however,that the value exceeds the cost due to the synergy of all of usworking together for the betterment of our industry. In times likethis, I don’t believe any of us can afford not to be a member.When the time comes to renew your membership for anotheryear, I urge you to keep PIOGA on your list of essential compa-ny expenses. ■

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Page 28: The PIOGA Press - November 2015 issue

Page 28 The PIOGA Press

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Page 29: The PIOGA Press - November 2015 issue

February 2014 Page 29November 2015 Page 29

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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Previous Year Currrent Year

Pennsylvania Rig Count

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Page 30: The PIOGA Press - November 2015 issue

Page 30 The PIOGA Press

Apex Energy (PA) LLC 2 10/8/15 129-28901* Westmoreland Hempfield Twp10/8/15 129-28902* Westmoreland Hempfield Twp

Cameron Energy Co 2 10/2/15 123-47888 Warren Sheffield Twp10/28/15 123-47887 Warren Sheffield Twp

Chesapeake Appalachia LLC 3 10/9/15 131-20511* Wyoming Meshoppen Twp10/10/15 131-20514* Wyoming Meshoppen Twp10/11/15 131-20516* Wyoming Meshoppen Twp

Chief Oil & Gas LLC 1 10/25/15 015-23255* Bradford Troy TwpEM Energy PA LLC 10 10/4/15 019-22467* Butler Washington Twp

10/7/15 019-22466* Butler Washington Twp10/9/15 019-22459* Butler Washington Twp10/10/15 019-22463* Butler Washington Twp10/10/15 019-22468* Butler Washington Twp10/11/15 019-22462* Butler Washington Twp10/12/15 019-22465* Butler Washington Twp10/12/15 019-22460* Butler Washington Twp10/13/15 019-22464* Butler Washington Twp10/13/15 019-22461* Butler Washington Twp

EQT Production Co 2 10/21/15 125-27741* Washington Amwell Twp10/21/15 125-27742* Washington Amwell Twp

Greenland Financial LLC 1 10/13/15 123-47903 Warren Conewango TwpHilcorp Energy Co 4 10/13/15 073-20493* Lawrence North Beaver Twp

10/21/15 073-20512* Lawrence North Beaver Twp10/22/15 073-20521* Lawrence North Beaver Twp10/23/15 073-20520* Lawrence North Beaver Twp

Howard Drilling Inc 1 10/19/15 083-56667 McKean Wetmore TwpLendrum Energy LLC 1 10/19/15 121-45415 Venango Pinegrove TwpKyle McNeal & Steven McNeal

dba Forest Chem 2 10/7/15 123-47809 Warren Sheffield Twp10/12/15 123-47808 Warren Sheffield Twp

Range Resources Appalachia 10 10/3/15 125-27619* Washington Chartiers Twp10/3/15 125-27620* Washington Chartiers Twp10/4/15 125-27622* Washington Chartiers Twp10/5/15 125-27734* Washington Chartiers Twp10/6/15 125-27623* Washington Chartiers Twp10/7/15 125-27621* Washington Chartiers Twp10/19/15 125-27484* Washington N Strabane Twp10/19/15 125-27503* Washington N Strabane Twp10/20/15 125-27483* Washington N Strabane Twp10/20/15 125-27482* Washington N Strabane Twp

Rice Drilling B LLC 5 10/21/15 125-27728* Washington N Bethlehem Twp10/21/15 125-27729* Washington N Bethlehem Twp

10/21/15 125-27730* Washington N Bethlehem Twp10/21/15 125-27731* Washington N Bethlehem Twp10/21/15 125-27732* Washington N Bethlehem Twp

Seneca Resources Corp 12 10/17/15 047-24949* Elk Jones Twp10/17/15 047-24950* Elk Jones Twp10/17/15 047-24951* Elk Jones Twp10/18/15 047-24952* Elk Jones Twp10/18/15 047-24953* Elk Jones Twp10/27/15 047-24933* Elk Jones Twp10/28/15 047-24959* Elk Jones Twp10/28/15 047-24934* Elk Jones Twp10/29/15 047-24935* Elk Jones Twp10/29/15 047-24940* Elk Jones Twp10/30/15 047-24936* Elk Jones Twp10/30/15 047-24937* Elk Jones Twp

SWEPI LP 5 10/15/15 117-21807* Tioga Middlebury Twp10/15/15 117-21808* Tioga Middlebury Twp10/15/15 117-21809* Tioga Middlebury Twp10/13/15 117-21792* Tioga Osceola Twp

8 10/14/15 117-21794* Tioga Shippen TwpSWN Production Co LLC 10/5/15 115-22083* Susquehanna Great Bend Twp

10/16/15 115-22086* Susquehanna Great Bend Twp10/18/15 115-21648* Susquehanna Great Bend Twp10/20/15 115-22085* Susquehanna Great Bend Twp10/29/15 125-27736* Washington West Finley Twp10/29/15 125-27739* Washington West Finley Twp10/29/15 125-27737* Washington West Finley Twp10/29/15 125-27738* Washington West Finley Twp

Universal Resources Holdings 1 10/3/15 123-47902 Warren Sugar Grove TwpVantage Energy Appalachia II 4 10/17/15 059-26961* Greene Gray Twp

10/17/15 059-26962* Greene Gray Twp10/17/15 059-26963* Greene Gray Twp10/17/15 059-26964* Greene Gray Twp

Wholeben Patricia D 1 10/7/15 123-47798 Warren Mead TwpXTO Energy Inc 3 10/29/15 019-22473* Butler Jefferson Twp

10/28/15 019-22492* Butler Penn Twp10/28/15 019-22481* Butler Penn Twp

Spud Report:October

The data show below comes from the Department ofEnvironmental Protection. A variety of interactive reports are

OPERATOR WELLS SPUD API # COUNTY MUNICIPALITY OPERATOR WELLS SPUD API # COUNTY MUNICIPALITY

available at www.portal.state.pa.us/portal/server.pt/community/oil_and_gas_reports/20297.

The table is sorted by operator and lists the total wells report-ed as drilled last month. Spud is the date drilling began at a wellsite. The API number is the drilling permit number issued to thewell operator. An asterisk (*) after the API number indicates anunconventional well.

October totalsTotal wells 78Unconventional 69Conventional 9Gas 69Oil 8Combination oil/gas 1

Page 31: The PIOGA Press - November 2015 issue

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

CONSOL Energy)Sam Fragale (Vice Chairman), Freedom Energy Resources 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.Carl Carlson, Range Resources - Appalachia, LLCMike Cochran, Energy Corporation of AmericaDon A. Connor, Open Flow EnergyTed Cranmer, TBC ConsultingJack Crook, Atlas Resource Partners, LPMichael Donovan, Seneca Resources CorporationRobert 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, LLC Stephen Rupert, Texas Keystone, Inc.Jake Stilley, Patriot Exploration CorporationWilliam Stoner, Universal Well Services, Inc.Burt A. Waite, Moody and Associates, Inc.Thomas Yarnick, XTO Energy

Committee ChairsEnvironmental Committee

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

Legislative CommitteeBen Wallace, Penneco Oil Company

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 Carbis Toothman, LLP

Communications CommitteeTerry Jacobs, Penneco Oil Company, Inc.

StaffLou D'Amico ([email protected]), President & Executive DirectorKevin Moody ([email protected]), Vice President & General Counsel Debbie Oyler ([email protected]), Director of Member Services and

Finance Matt Benson ([email protected]), Director of Internal Communications

(also newsletter advertising & editorial contact)Joyce Turkaly ([email protected]), Director of Natural Gas Market

DevelopmentDan Weaver ([email protected]), Public Outreach DirectorDanielle Boston ([email protected]), Director of AdministrationTracy Zink ([email protected]), 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)167 Wolf Farm Road, Kane, PA 16735

Phone/fax 814-778-2291© 2015, Pennsylvania Independent Oil & Gas Association

February 2014 Page 31November 2015 Page 31

PIOGA EventsInfo: www.pioga.org/events

PIOGA Winter MeetingFebruary 23-24, 2016, Seven Springs Mountain Resort,

Champion

Summer Golf Outing & PicnicJune 5, 2016 (tentative), Wanango Golf Club, Reno

Pig Roast, Equipment Show and Technical ConferenceJuly 21-22, 2016, Seven Springs Mountain ResortChampion

Divot Diggers Golf OutingAugust 25, 2016, Tam O’Shanter Golf Club, Hermitage

Industry EventsIOGAWV Winter Meeting

February 2-3, 2016, Charleston, WVInfo: iogawv.com/2016-winter-meeting-registration

IPAA Congressional Call-UpFebruary 29-March 2, 2016, Washington, DCInfo: www.ipaa.org/meetings-events/upcoming-meetings

OOGA Winter MeetingMarch 16-18, 2016, Columbus, OHInfo: www.ooga.org/events

IPAA Midyear MeetingJune 27-29, 2016, Colorado Springs, COInfo: www.ipaa.org/meetings-events/upcoming-meetings

IOGANY Summer MeetingJuly 13-14, 2016, Peek'n Peak Resort, Findley Lake, NYInfo: www.iogany.org/events.php

Calendar of Events

➤ More events: www.pioga.org

Have industry colleagues or vendors you thinkshould be PIOGA members? Encourage them toclick on “Join PIOGA” at the top of ourhomepage, www.pioga.org. Or, let us know andwe’ll contact them. There’s strength in numbers!

New PIOGA members — welcome!

H-Frac Consulting Services, LLC2216 Golfview Drive NE, New Philadelphia, OH 44663330-401-1921Associate

Industrial Data Management, Inc.3983 Union Avenue, Homeworth, OH 44634720-222-9666www.idm-es.comProfessional Firm—engineering, graphics/design, solar

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

Address Service Requested

[email protected]

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