the pioga press - september 2015

36
September 2015 • Issue 65 The PIOGA press The monthly newsletter of the Pennsylvania Independent Oil & Gas Association (Continues on page 2) (Continues on page 30) Drone’s eye view. PIOGA Outreach Director Dan Weaver used a drone to capture this aerial view of a well pad outside Hermitage in Mercer County. ® T he United States Environmental Protection Agency (EPA) recently released several proposals seeking to reduce greenhouse gas and other emissions from the oil and natu- ral gas sector. EPA’s proposals are part of the Obama administra- tion’s larger Climate Action Plan, a goal of which is to reduce methane emissions from the oil and gas industry by 40 to 45 per- cent from 2012 levels by 2025. EPA also stated that the propos- als seek to protect public health by seeking to reduce emissions of volatile organic compounds (VOCs), a precursor to ground- level ozone formation. In addition to these emissions-related EPA releases multiple proposals under the Clean Air Act measures, EPA also released a proposed rule intended to clarify single source determina- tions for entities within the oil and gas industry. Together, these proposals will like- ly affect a wide array of facilities within the industry, including natural gas well sites, processing plants, compressor stations and storage facilities. Proposed revisions to NSPS Subpart OOOO to establish methane and VOC standards One of the proposed rules that EPA released on August 18 would revise the New Source Performance Standards (NSPS) for crude oil and natural gas production, transmission and distribu- tion, 40 C.F.R. 60 Subpart OOOO. (See related article, page 26.) This NSPS rule was first promulgated in 2012 and has since been revised multiple times. Under the current proposal, certain new, modified or reconstructed sources at affected facilities cur- Varun Shekhar Author: DEP further tweaks Chapter 78 rulemaking T he Department of Environmental Protection has released what it is referring to as the draft final-form rule in its long-running rewrite of regulations governing oil and gas surface operations. Gone from the version unveiled on August 11 are provisions for noise mitigation and centralized storage tanks for wastewater. Additional changes, DEP said, were made to address comments received and to add clarity. The rulemaking, in the works for more than four years, addresses Subchapter C of Chapter 78 (conven- tional oil and gas operations) and Chapter 78a (unconventional opera- tions). The latest revisions were made public ahead of meetings in late August and early September of DEP’s Conventional Oil and Gas Advisory Committee (COGAC) and Oil and Gas Join us for the Annual Meeting . . . . . . . . . . . . 6 PNDI training at Annual Meeting . . . . . . . . . . 6 Board of Directors voting . . . . . . . . . . . . . . . . 6 Eastern Oil & Gas Conference and Show . . 15 EPA proposes “adjacent” clarification . . . . . . 16 National forest private minerals legislation . . 19 Wastewater study updated . . . . . . . . . . . . . . 19 Lower your “MOD”. . . . . . . . . . . . . . . . . . . . . 20 New PIOGA subcommittee opportunities . . . 22 PIOGA at Power Gen . . . . . . . . . . . . . . . . . . 23 Create your connections . . . . . . . . . . . . . . . . 25 New Buyers’ Guide coming . . . . . . . . . . . . . . 25 Budget slows fall legislation . . . . . . . . . . . . . 25 New Legislative Committee vice chair . . . . . 25 EPA proposes methane reductions. . . . . . . . 26 Court halts WOTUS rule—in some states . . 27 Divot Diggers pictorial . . . . . . . . . . . . . . . . . . 28 PIOGA Member News . . . . . . . . . . . . . . . . . 28 New Members . . . . . . . . . . . . . . . . . . . . . . . . 29 PIOGA Profile: Introduce your company . . . . 29 Oil & Gas Trends . . . . . . . . . . . . . . . . . . . . . . 32 July Spud Report . . . . . . . . . . . . . . . . . . . . . 34 Calendar of Events . . . . . . . . . . . . . . . . . . . . 35 PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 35

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

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Page 1: The PIOGA Press - September 2015

September 2015 • Issue 65

The

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

(Continues on page 2)

(Continues on page 30)

Drone’s eye view. PIOGA Outreach Director Dan Weaverused a drone to capture this aerial view of a well pad outsideHermitage in Mercer County.

®

The United States Environmental Protection Agency (EPA)recently released several proposals seeking to reducegreenhouse gas and other emissions from the oil and natu-

ral gas sector. EPA’s proposals are part of the Obama administra-tion’s larger Climate Action Plan, a goal of which is to reducemethane emissions from the oil and gas industry by 40 to 45 per-cent from 2012 levels by 2025. EPA also stated that the propos-als seek to protect public health by seeking to reduce emissionsof volatile organic compounds (VOCs), a precursor to ground-level ozone formation. In addition to these emissions-related

EPA releases multiple proposals under the Clean Air Actmeasures, EPA also released a proposed ruleintended to clarify single source determina-tions for entities within the oil and gasindustry. Together, these proposals will like-ly affect a wide array of facilities within theindustry, including natural gas well sites,processing plants, compressor stations andstorage facilities.

Proposed revisions to NSPS SubpartOOOO to establish methaneand VOC standards

One of the proposed rulesthat EPA released on August 18would revise the New Source Performance Standards (NSPS) forcrude oil and natural gas production, transmission and distribu-tion, 40 C.F.R. 60 Subpart OOOO. (See related article, page 26.)This NSPS rule was first promulgated in 2012 and has sincebeen revised multiple times. Under the current proposal, certainnew, modified or reconstructed sources at affected facilities cur-

Varun Shekhar

Author:

DEP further tweaksChapter 78 rulemaking

The Department of Environmental Protection has releasedwhat it is referring to as the draft final-form rule in itslong-running rewrite of regulations governing oil and gas

surface operations. Gone from the version unveiled on August 11are provisions for noise mitigation and centralized storage tanksfor wastewater. Additional changes, DEP said, were made to

address comments received and to addclarity.

The rulemaking, in the works formore than four years, addressesSubchapter C of Chapter 78 (conven-tional oil and gas operations) andChapter 78a (unconventional opera-tions). The latest revisions were madepublic ahead of meetings in late Augustand early September of DEP’sConventional Oil and Gas AdvisoryCommittee (COGAC) and Oil and Gas

Join us for the Annual Meeting . . . . . . . . . . . . 6PNDI training at Annual Meeting . . . . . . . . . . 6Board of Directors voting . . . . . . . . . . . . . . . . 6Eastern Oil & Gas Conference and Show . . 15EPA proposes “adjacent” clarification . . . . . . 16National forest private minerals legislation . . 19Wastewater study updated . . . . . . . . . . . . . . 19Lower your “MOD”. . . . . . . . . . . . . . . . . . . . . 20New PIOGA subcommittee opportunities . . . 22PIOGA at Power Gen . . . . . . . . . . . . . . . . . . 23Create your connections . . . . . . . . . . . . . . . . 25New Buyers’ Guide coming. . . . . . . . . . . . . . 25

Budget slows fall legislation . . . . . . . . . . . . . 25New Legislative Committee vice chair . . . . . 25EPA proposes methane reductions. . . . . . . . 26Court halts WOTUS rule—in some states . . 27Divot Diggers pictorial . . . . . . . . . . . . . . . . . . 28PIOGA Member News . . . . . . . . . . . . . . . . . 28New Members. . . . . . . . . . . . . . . . . . . . . . . . 29PIOGA Profile: Introduce your company. . . . 29Oil & Gas Trends. . . . . . . . . . . . . . . . . . . . . . 32July Spud Report . . . . . . . . . . . . . . . . . . . . . 34Calendar of Events . . . . . . . . . . . . . . . . . . . . 35PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 35

Page 2: The PIOGA Press - September 2015

Page 2 The PIOGA Press

EPA Clean Air Act proposals: Continued from page 1

rently regulated under Subpart OOOO within the oil and naturalgas source category would become subject to methane and VOCemissions standards.

The proposed NSPS revisions would also apply to thosesources which are regulated under the EPA’s 2012 NSPS forVOCs under Subpart OOOO, including hydraulically fracturedgas well completions and equipment leaks at natural gas process-ing plants, as well as those sources which are regulated forVOCs, including certain pneumatic controllers and compressors.Under the proposal, wet seal centrifugal compressors (exceptthose located at well sites) would be required to achieve a 95percent reduction of methane and VOC emissions, while recipro-cating compressors not located at well sites would be subject tothe work-practice standard of replacing rod packing dependingon the source’s hours of operation, duration of time or to re-routeemissions from the rod packing to a closed vent system. Further,under the proposed NSPS revisions, pneumatic controllers otherthan those located at natural gas processing plants would be sub-ject to a bleed rate limit of six standard cubic feet per hour.Pneumatic controllers located at processing plants would contin-ue to be subject to the zero bleed rate as specified in the currentNSPS.

The proposed NSPS revision would expand the scope ofsources subject to these emissions standards to include severalnew activities or equipment, including hydraulically fractured oilwell completions, pneumatic pumps, and fugitive emissions fromwell sites and compressor stations. Specifically, natural gas-driv-en chemical/methanol and diaphragm pneumatic pumps, other

than those located at natural gas processing plants, would berequired to reduce methane and VOC emissions by 95 percent ifa control device is already available at the site. Such pumps atprocessing plants, however, would be subject to a zero methaneand VOC emissions requirement. The proposal would also applyhydraulically fractured well completion requirements for gaswells to oil wells. Hydraulically fractured oil well completion ofnon-wildcat or non-delineation wells to use “reduced emissionscompletions,” where feasible, in combination with a completioncombustion device, whereas hydraulically fractured oil well com-pletion of wildcat or delineation wells would be required to use acompletion combustion device.

Further, new and modified well sites and compressor stationswould be required under the proposed NSPS revisions to imple-ment leak detection and repair (LDAR) programs either on asemiannual or annual basis to identify sources of fugitive emis-sions. However, the frequency of LDAR surveys would be poten-tially adjusted based on the rate at which surveys indicate fugi-tive emissions from components. Applicable operators wouldalso be required to repair any such identified sources of fugitiveemissions within 15 days.

Draft Control Techniques Guidelines for RACTdeterminations within the oil and natural gas industry

On the same day as it released its proposed NSPS revisionsfor methane and VOC emissions from the oil and gas industry,EPA also released a draft Control Techniques Guidelines (CTG)document, intended to provide state and local air agencies withincertain nonattainment areas for ozone with guidance for deter-mining reasonably available control technology (RACT) for

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Page 4 The PIOGA Press

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Page 5: The PIOGA Press - September 2015

February 2014 Page 5September 2015 Page 5

reducing VOC emissions from certain sources within the oil andgas sector. The CTG document provides recommended RACTdeterminations for specific sources in the oil and gas industry,which state and local air agencies can adopt when making theirown formal RACT determinations. However, the CTG documentdoes not constitute a binding regulation, and states must makeRACT determinations which are subsequently incorporated intheir respective state implementation plans.

The RACT recommendations in the draft CTG document cor-respond to large degree to the VOC reductions that are providedin the proposed NSPS revisions. These recommendationsinclude, for example, using vapor recovery units or other mecha-nisms to route emissions to the process or to a combustiondevice for applicable storage vessels. For reciprocating compres-sors in the production and processing segments, EPA recom-mends replacement of rod packing systems every three years or26,000 hours of operation as RACT, whereas for wet seal cen-trifugal compressors, EPA recommends use of a closed vent sys-tem to route emissions to a combustor or to the compressor orfuel line.

Recommended RACT under the draft CTG document forequipment leaks at processing plants would include institution ofLDAR programs required under NSPS Subpart VVa for equip-ment in VOC service except for compressors, which would lowerthe leak threshold definitions and increase monitoring frequencyas compared to most LDAR programs currently used. For contin-uous bleed natural gas-driven pneumatic controllers at naturalgas processing plants, RACT for most sources was recommendedto entail installation of an instrument air system.

The draft CTG applies only to areas within the OzoneTransport Region or in other areas designated as “moderate”nonattainment areas or worse for ozone. In addition, the draftCTG is not applicable to equipment in the transmission segment,due to such equipment’s insignificant VOC emissions.

Clarification of the term “adjacent” in single sourcedeterminations

EPA also released on August 18 a proposed rule regardingsingle source determinations for purposes of New Source Review(NSR) and Title V air permitting. (See related article, page 16.)Under both programs, a “stationary source” is defined to includeemission units that, among other things, are located on “one ormore contiguous or adjacent properties.” Vagueness in the mean-ing of “adjacent” under this definition has inspired significantdebate and litigation, particularly as EPA has allowed for consid-erations of “functional interdependence” as a component of themeaning of “adjacent.” This practice has been challenged in sev-

eral courts as well as the Pennsylvania Environmental HearingBoard, and was rejected by the U.S. Court of Appeals for theSixth Circuit in Summit Petroleum Corp. v. EPA, 690 F.3d 733(6th Cir. 2012).

In response to recent litigation, EPA released on August 18 aproposed rule offering two approaches to clarify the meaning of“adjacent” in the NSR and Title V permitting contexts. Under thefirst option (identified as “preferred” by EPA), the definition of“adjacent” would include those sources or activities “located onthe same surface site, or on surface sites that are located withinone-quarter mile of one another.” Under the second option,“adjacent” would include equipment which is either “proximate”or “exclusively functionally interrelated,” such as through physi-cal connection (e.g., through pipelines), exclusive delivery ofproduct from one group of equipment to the other via truck ortrain, or whether one group of equipment would be able to oper-ate if the other group of equipment was not operating.

Providing inputThese proposals released by EPA are expected to have a sig-

nificant impact on the oil and natural gas sector. Operators ofsources that may be covered under each of these proposals areencouraged to submit comments. Public comments on each ofthe above proposals will be accepted until 60 days after theirrespective publication in the Federal Register. In addition, EPAwill hold public hearings on these proposals on September 29 inPittsburgh, as well as on September 23 in Denver, Colorado, andDallas, Texas. Those wishing to present oral comments at thehearings should register in advance through EPA’s online regis-tration form at www.epa.gov/airquality/oilandgas. ■

Page 6: The PIOGA Press - September 2015

Page 6 The PIOGA Press

Join us for the Annual Meeting

You are invited to attend PIOGA’s Annual MembershipMeeting on Tuesday, September 29, at the RamadaGreensburg Hotel and Convention Center in

Greensburg. Not only will you learn about the work of the asso-ciation, but you’ll be helping to guide our future direction.

The meeting runs from 2 to 4 p.m., with a reception immedi-ately following.

There is no charge to participate in the meeting or reception,but we do ask that you register to provide us with an accuratehead count.

The agenda includes:• Chairman’s report and board member Introductions.• President & executive director updates and staff introduc-

tions.• Voting on proposed changes to our bylaws to reconfigure the

Board of Directors and Executive Committee to require addition-al representatives from voting member classes other thanProducer members to reflect changes in our industry and associa-tion membership.

• Committee updates—Environmental, Pipeline and GasMarket Development, Safety, Tax, and Legislative.

• Legal update.• Member open forum.Please RSVP to attend by September 23. Log into the new

membership management system at members.pioga.org and clickon PIOGA’s Annual Member Meeting & Reception under theEvents list. ■

Thirteen members are vying for 11 seats on the PIOGABoard of Directors. A ballot has been mailed to the mainrepresentative of each PIOGA member company and must

be returned to the PIOGA office by mail or hand-delivered nolater than 5 p.m. on September 25.

Under PIOGA’s bylaws, board members are elected by simplemajority. The seven candidates receiving the most votes will bechosen to serve three-year terms beginning with the PIOGAAnnual Meeting on September 29.

Biographies for the 13 candidates follow. Those marked withan asterisk (*) are current board members seeking reelection.

If you have questions about voting, contact Danielle Boston at724-933-7306 ext. 28 or [email protected].

L. Richard Adams*Chief Oil & Gas, LLC

Rich Adams had a distinguished 35-year career at theNorthcentral Regional office of the Pennsylvania Department ofEnvironmental Protection in Williamsport. Throughout his career,he specialized in water quality and watershed protection, provid-ing program management for environmental permitting and proj-ects including industrial and mine drainage treatment plants, andstream and wetland restoration. He was also instrumental indeveloping DEP’s policies and modeling protocols for the specialprotection programs on high quality (HQ) / exceptional value (EV)watersheds. In his last two years with DEP, he was tasked withmanaging the water resource elements of Marcellus developmentin northcentral PA.

After retiring from DEP in 2008, he consulted with theSusquehanna River Basin Commission on projects relating towater usage and Marcellus development. In 2009, Adams washired by Chief Oil & Gas as a senior regulatory advisor for waterresources in its Williamsport office. Over the past six years, hehas held positions of increasing responsibility and is currently theDirector of EHS Programs. His team of nine Chief employeesincludes environmental specialists, engineers, and health andsafety coordinators.

Adams, originally from Aliquippa, holds a Bachelor of Sciencein chemical engineering from Bucknell University, and a Master’sin chemical engineering with a minor in environmental studiesfrom Clarkson University.

Stanley J. Berdell*BLX, Inc.

Stan Berdell is the President of BLX, Inc., a privately ownedand operated company established in 1989. The company is anindependent producer of natural gas and operates wells and leas-es in the Appalachian Basin. It was the first independent producerto drill and produce Marcellus Shale wells in Western PA. In addi-tion, Stan is the managing partner of Redmill Drilling, Kinzua Oil,LLC and Mt. Pleasant Enterprises, all of which operate wells inWestern PA. BLX, Inc. has been a member of PIOGA for 15-plusyears. Stan is very active in his community, serving with theYMCA board, school board and he is running for his third term onthe PIOGA board.

Annual Meeting extra: PNDI training

The Pennsylvania Natural Diversity Inventory Environ -mental Review Tool (PNDI ER Tool) enables the pub-lic to perform online PNDI searches for potential

impacts to threatened, endangered, special concern speciesand special concern resources. Anyone including propertyowners, consultants, project planners and Department ofEnvironmental Protection and county conservation districtstaff can access the tool for PNDI project screening.

The PNDI ER Tool is used prior to submitting permitapplications to DEP or during any project pre-planning phas-es. The user performs the search online using the ER Tool,prints the results from the search (called PNDI EnvironmentalReview Receipt) and follows the instructions on the receipt.

Since 2014, DCNR has been working to upgrade the PNDIER Tool, and department staff will present the new tool andits technical features to PIOGA members prior to the begin-ning of the Annual Membership Meeting on September 29.The training runs from 12:30 to 1:30 p.m. at the GreensburgRamada. DCNR will provide example projects to highlightthe new capabilities, data resources and information that willbe available when the tool is upgraded this fall.

Presenters will include Greg Podniesinski, chief of theDCNR Bureau of Forestry’s Conservation and NaturalResources Natural Heritage Section, and Kent Taylor, techni-cal lead for DCNR on the development of the new PNDI tool.

There is no charge to participate, but we do ask that youregister via the membership management system.

Voting for PIOGA Board of Directors is now open

Page 7: The PIOGA Press - September 2015

February 2014 Page 7September 2015 Page 7

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Page 8: The PIOGA Press - September 2015

Page 8 The PIOGA Press

Don A. Connor*Open Flow Energy

Don A. “Donnie” Connor is the General Manager of Open FlowEnergy, one of the oldest energy marketing companies in thecountry, and is a seasoned veteran in the industry. He joinedOpen Flow in 1987, essentially since its very beginning, and isstill involved in nearly all facets of the business. He’s been activein PIOGA and both of its preceding organizations (POGAM andPNGA/IOGA) since the late 1980s, serving on the Board ofDirectors since 2006. He has been involved, and in some caseshas lead the charge, in many of the proceedings that haveshaped the gas marketing industry into what it is today. He is alife-long resident of the DuBois area and attended the OhioInstitute of Technology.

Ted B. Cranmer*Mount Chestnut Oil & Gas Development Corp. / TBCConsulting

Ted Cranmer is the owner of Mount Chestnut Oil and GasDevelopment Corporation and TBC Consulting firm He receivedhis B.S. in Petroleum and Natural Gas Engineering from WestVirginia University and also received an A.S. Degree inMathematics from Butler County Community College. Ted hasover 31 years of experience in all company operations and man-agement, including lease evaluation, drilling, production, naturalgas marketing and land acquisitions. Ted currently serves on theboard of PIOGA and is the past treasurer of the Pennsylvania Oiland Gas Association.

Jack Crook*Atlas Resource Partners LP

Jack is currently the Vice President of Environment, Health,Safety & Security for Atlas Resource Partners, LP. Atlas has oper-

ations in 14 states with active wells in the Marcellus, Utica,Marble Falls, Eagle Ford and the Mississippian Lime. Other pro-ducing assets are located in the Arkoma, Niobrara, Black Warrior,Raton, Rangely, Appalachia, Barnett and Illinois basins. As acompany focused on acquisitions and growth, due diligence forenvironmental and regulatory matters takes up a considerableamount of his time. He currently sits on the Executive Committeefor Atlas Resource Partners and does a quarterly update with theBoard of Directors EHS Committee.

A graduate of Penn State University, he started work in theDenver-Julesburg Basin based in Fort Morgan, Colorado, andalso for a time in Houston, Texas. After a downturn in domesticdrilling, he returned to Pennsylvania to work as a regulator for 24years for the Department of Environmental Protection. He is aLicensed Professional Geologist as well as a Board member forPIOGA and serves on the PIOGA Legislative Committee as wellas the Ohio Oil & Gas Association Regulatory Workgroup. InMarch 2015 he chaired the Marcellus-Utica Water ManagementInitiative in Pittsburgh. He also sits on the Advisory Board - ShaleGas Tight Oil Water Management, for the London BusinessConference Group and is a frequent speaker at many training andeducation events.

Sam Fragale*Freedom Energy Resources LLC

Sam Fragale is Co-Founder, President & CEO of FreedomEnergy Resources LLC, which is a startup company engaged inthe exploration and development of oil and gas assets primarily inthe Appalachian Basin, with a focus on unconventional resources.Prior to the creation of Freedom Energy Resources LLC, Samworked in oil and gas industry for over 30 years for companiessuch as Chief Oil & Gas, LLC as Senior VP Operations, PhillipsProduction Company/Phillips Drilling Company as Sr. Vice

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Page 9: The PIOGA Press - September 2015

February 2014 Page 9September 2015 Page 9

President/President & COO and Shell Offshore Inc. as aReservoir Engineer.

Sam is a former Member of Technical Advisory Board for theDepartment of Environmental Protection and currently serves onthe PIOGA’s Executive Committee as Vice Chairman.

Daniel A. GarciaLeech Tishman

Dan Garcia is an associate in the Energy, Construction andGovernment Relations Practice Groups in Leech Tishman’sPittsburgh office. Dan has a vast amount of experience with oiland gas midstream development programs. During the course ofhis career, he has handled a wide variety of pipeline safety andregulatory issues to ensure compliance with PHMSA andPennsylvania Public Utility Commission regulations. Dan hasadvised clients in the development of comprehensive pipelinesafety and compliance programs. He also has extensive experi-ence in issues relating to rights-of-way, landowner disputes, ease-ments, condemnation proceedings, and other midstream-relatedland issues.

Dan possesses a solid understanding of midstream economicsand pipeline construction and development, with experience inprogram management, capital expansion and investment projects,and the effective navigation of state and federal pipeline regula-tions.

Dan also has a background in government relations in Texasand Pennsylvania. As the District Director for a Texas StateRepresentative, he developed relationships with various stateagencies like TXDOT and the Railroad Commission. InPennsylvania, Dan has been a presenter on various oil and gastopics at a number of public forums, township meetings, and con-ferences and is a strong advocate for the industry.

Prior to joining Leech Tishman, Dan served as the BusinessDevelopment Director with Bowman Consulting Group, where hewas responsible for the development and execution of itsStrategic Growth Plan, leading to expansion opportunities in landdevelopment and oil and gas infrastructure (gas and liquidspipeline development) across the country.

James W. Hoover*Phoenix Energy Productions, Inc.

James is President of Phoenix Energy Productions, Inc. whichprovides quality engineering services to the oil and gas industry.Under James’ leadership, Phoenix supervised the drilling andcompletion of the first on-shore gas well drilled in the province ofNova Scotia, since 2002 has funded and managed annualLimited Partnerships that have drilled over 60 wells in theAppalachian Basin, supervised the drilling and completion of theMarcellus Shale discovery well in 2003 and in 2010 became thefirst Pennsylvania oil and gas company in history to successfullycomplete horizontal natural gas production wells in the traditionalUpper Devonian sandstone reservoirs of Pennsylvania. Prior toworking at Phoenix Energy Productions, Inc., James held posi-tions at CNG Producing Company, Peoples Natural GasCompany, Apollo Gas Company and Delta Drilling Company.

James is a 1974 graduate of Indiana University ofPennsylvania with a B.S. in Geology and completed the ExecutiveM.B.A. Program at the University of Pittsburgh in 1988.

“PA Independent Oil and Gas Association”

Page 10: The PIOGA Press - September 2015

Page 10 The PIOGA Press

James E. Kriebel*Kriebel Companies

James E. Kriebel is president and chief executive officer of theKriebel Companies which operate over 1,700 wells in westernPennsylvania. He graduated from the University of Miami with abachelor’s degree in Business Administration. Mr. Kriebel, anative of Clarion County, and his family, have been involved innatural resource development in western Pennsylvania for over40 years.

Jim is an active participant in the natural gas industry. Heserves on the Board of Directors of the PennsylvaniaIndependent Oil & Gas Association and also serves as a memberof the Executive, Legislative and Pipeline & Gas MarketDevelopment Committees. Jim is a member of the Society ofPetroleum Engineers and the Independent Petroleum Associationof America. In his local community, Mr. Kriebel serves on theFinance Committee for Clarion’s Church of God and is a memberof the Clarion Community Foundation and Clarion HospitalAuthority.

William E. MillerEnvironmental Wells Development, Inc. and Polestar

William Miller is President and Owner of Environmental WellsDevelopment, Inc., which is an environmental consulting companythat provides complete environmental planning and consultingservices to the oil and gas industry and to the land developmentindustry. William also is CEO/President and Owner, Polestar, for-merly Dra-Surv, Inc. which is a full service engineering and sur-veying company with emphasis on environmental consulting andland development for the oil and gas industry, mining industry,commercial development, and various other industrial projects.Dra-Surv, Inc. is well established in Western Pennsylvania and for

over 30 years has done considerable work and is certified in thestates of Pennsylvania, New York, Ohio, West Virginia andMaryland. William is a 1972 graduate of Penn State Universitywith a Civil Engineering degree and resides in Indiana, PA.

Stephen P. Rupert*Texas Keystone, Inc

Stephen Rupert is President/COO of Texas Keystone, Inc. andhas over 39 years of oil and gas experience as a production geol-ogist, field and operations engineer and executive in theAppalachian Basin and has worked in virtually every aspect ofthe E&P business including drilling, completion, production, gov-ernment relations, environmental regulations, acquisitions,reserve analysis, pipeline and compression, land leasing, and gasmarketing.

Prior to joining TKI, he held the position of Vice President –Regulatory and Business Development with Inflection EnergyLLC, a private equity funded Marcellus Shale focused company.Prior to this role, Steve held various positions with RangeResources Corporation (1990-2009) and its predecessor compa-nies including: VP of Operations – Appalachian Business Unitfrom 2001 to 2009; Operations Manager for PA/WV from 1994 to2001; and Production Geologist from 1990 to 1994. He workedfrom 1988 to 1990 as an independent oil and gas consultant andheld from 1976 to 1988 the positions of District Manager, SalesEngineer and General Logging Engineer at Dresser Atlas, and itspredecessors, where he worked extensively in PA, NY, OH andWV. He served on the Board of Directors of the Marcellus ShaleCoalition, SPE, IOGA-PA, as well as serving two two-year termsas President of the Independent Oil and Gas Association of PA(IOGA-PA). Steve attended Indiana University of Pennsylvania forhis B.S. in Geology.

[email protected]

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Page 11: The PIOGA Press - September 2015

February 2014 Page 11September 2015 Page 11

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Page 12: The PIOGA Press - September 2015

Page 12 The PIOGA Press

Gary E. Slagel*Steptoe and Johnson PLLC

Gary Slagel is a Government Affairs Specialist with Steptoeand Johnson PLLC. Gary works out of Steptoe’s Canonsburgoffice and represents clients on legislative and regulatory issuesimpacting the natural gas and coal industries.

Gary was formerly employed in various positions with ConsolEnergy and CNX Gas including Senior Advisor, EnvironmentalAffairs and Director of Government Affairs.

Gary currently serves on PIOGA’s Executive Committee as theChairman of theBoard and asChairman of theWest Virginia Oiland Natural GasAssociation’sMarcellus ShaleAlliance. He is amember of theIndependentPetroleumAssociation ofAmerica’sEnvironmentaland SafetyCommittee. Garyalso served asthe Chair of theMarcellus ShaleCoalition’sRegulatoryCommittee.

He was appointed to and served as a member of thePennsylvania Department of Environmental Protection’s Oil andGas Technical Advisory Board since 1990 and was appointed toand served on Governor Corbett’s Marcellus Shale AdvisoryCommission.

Gary previously served as chairman of both the PennsylvaniaCoal Association and the Virginia Coal Association.

Tom Yarnick*XTO Energy, Inc

Originally from Johnstown, Tom graduated from JohnstownHigh School in 1974 and the University of Pittsburgh atJohnstown in 1978 with a B.S. degree in Environmental Biology(Terrestrial Ecology).

He has been employed by ExxonMobil from 1978 to present,holding a variety of positions associated with Environmental andregulatory affairs within the mining, chemicals, downstream, andupstream businesses, both domestic and international. SinceJune 2012, Tom has been assigned to XTO Energy’s AppalachiaDivision in Warrendale as an Environmental & RegulatoryAdvisor, actively engaged in environmental management and reg-ulatory development activities affecting oil and gas operationswithin the region.

Tom has been a PIOGA board member since 2012 and Vice-Chair of the Marcellus Shale Coalition’s Advocacy Committeesince January 2014. He has also been an active participant in theregulatory advocacy efforts of API-PA and the oil and gas tradeassociations of OH, WV, NY and MD. Tom has also been a mem-ber of the Natural Gas Advisory Committee of the PA Departmentof Natural Resources (DCNR) since August 2013. ■

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Page 13: The PIOGA Press - September 2015

September 2015 Page 13

Pre-Drilling Water Supply Inventory and Sampling

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Gas Well Permitting for Conventional and

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Fresh Water Determination Studies

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Stray Gas Migration Investigations

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Page 14: The PIOGA Press - September 2015

Page 14 The PIOGA Press

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Page 15: The PIOGA Press - September 2015

September 2015 Page 15

Why you should attend the Eastern Oil & Gas Conference and Trade Show

If you are like most people working in our industry, you get alot of emails trying to convince you to attend this confer-ence, that seminar or some other expo. We believe our

Eastern Oil & Gas Conference and Trade Show is one event youshould attend—particularly this year.

The 2015 edition takes place October 27-28 at the Monroe -ville Convention Center, just east of Pittsburgh. Here’s why wethink you should be there:

1. It’s the longest-running event of its kind in the region,produced by the industry, for the industry. The excitementover the region’s shale playsresulted in myriad entities host-ing conferences over the pastseveral years. Many of theseorganizers previously knewnothing about unconventionalgas, let alone the oil and gasbusiness. They simply saw theopportunity to cash in on a hottopic.

A lot of these conferences are gonenow, but we are still around. Our eventdates back to the 1970s, when it wasknown as the Eastern Oil & GasEquipment Show and was produced byone of our predecessor organizations, thePennsylvania Oil & Gas Association(POGAM). Unlike many other events,ours is put together by people who knowthe industry best—your trade association.We rely on our members to let us know what interests them,what concerns them and where they see opportunities. OurEastern Oil & Gas Conference and Trade Show reflects thatinsider’s edge.

2. We have an excellent program lined up. You can find adetailed, up-to-date conference schedule on our website(www.pioga.org), but here is an overview of the presentationsyou can expect over the day-and-a-half program:

• Addresses by Pennsylvania Governor Tom Wolf (invited)and State House Speaker Mike Turzai.

• Natural gas production company executives’ panel.• Dr. Bernard Weinstein of SMU’s Macguire Energy Institute

on the benefits of oil and gas in Pennsylvania.• The national impact of Northeast shale gas and how the

market will change as pipeline expansion projects come on line.• Factors affecting pricing.• Reserve lives of Marcellus and Utica wells.• Issues surrounding pooling in the region.• Identification and mitigation of gas migration.Additionally, the schedule is set up so that you have plenty of

opportunity to walk the show floor and get some networkingdone. We are particularly excited about our Tuesday-eveningnetworking reception, followed by a Halloween-themed social.Again, check out the event page on our website for a completeschedule.

We also have some new features lined up for this year’sevent. One is the Product and Services Showcase. A new addi-tion this year at major PIOGA events, the Showcase is a set of

sessions during our meetings that allow service companies, pro-fessional firms and suppliers to highlight their products in spe-cial presentations to attendees. The Showcase sessions will beheld in an “amphitheater” in the convention center’s North Hall.The sessions will be open to all visitors, not just those who areregistered for the conference portion of the event.

Another new feature is Producers Row. The exhibit floor willinclude special areas manned by representatives from our pro-ducer member companies. This will give participants a chance toget to know more about the companies that have turned

Pennsylvania into the nation’sNo. 2 gas-producing state.

The third new facet is a spe-cial equipment display area. Dueto the unpredictability of late-October weather, we won’t beoffering an outdoor exhibit areafor equipment. However, theconvention center’s North Hallwith its 26-foot-high ceiling is

able to accommodate some sizableequipment. Come and see what’s there!

3. If you don’t want to go to theconference, you can still visit the show.We hope you will take advantage of theknowledge that will be shared at the con-ference. But if you can’t do that, you canstill take in just the trade show. Showhours are 9 a.m. to 5 p.m. on Tuesday,October 27, and 9 a.m. to 3 p.m. on

Wednesday the 28th. The cost for show-only admission is $25 atthe door. As noted above, you can also take part in the Productand Services Showcase sessions even if you are there just for theshow.

4. Staying away because of the down market is not asmart excuse. Yes, our producers are facing tough times due topoor market conditions. But instead of staying away, it’s all themore important to participate to make new contacts and learnabout new market opportunities and fresh ways to make youroperations more efficient. Smart companies see opportunitieswhere others see doom and gloom.

And it’s a mistake to think that the entirety of our industryhas pulled back. There is a huge build-out of infrastructuregoing on get gas to market. We’re also seeing many companiesdeveloping new and expanded markets for our gas. Come andfind out what others are doing and how you can benefit.

5. If you have a product or service to market, you shouldbe exhibiting here. At this writing, we still have plenty ofexhibit spaces available. You should be taking advantage of thisopportunity to make new contacts, renew past relationships andlet others in the industry know what sets you apart. We’ve evenreduced that cost of booth space compared to our 2014 show,making it a better value yet. Full details and exhibitor registra-tion are available at www.pioga.org/exhibitor-information-2015.

Event information and conference registration is availableat www.pioga.org/event/2015-eastern-oil-and-gas-conference-and-trade-show.

We’ll plan on seeing you there!

Page 16: The PIOGA Press - September 2015

Page 16 The PIOGA Press

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).

EPA proposes to ‘clarify’ what‘adjacent’ means for purposes oftreating distinct sources of airemissions as a single sourceBy David Overstreet and Christopher NestorOverstreet & Nestor, LLC

On August 18, the U.S. Environmental Protection Agencyproposed to “clarify” the definition of “adjacent” used todetermine whether discrete sources of air emissions will

be considered to be a “single source” for purposes of permittingunder the federal Clean Air Act as it applies to the oil and naturalgas sector. The more sources deemed to be part of the permitted“source,” the greater the likelihood that the emissions from thediscrete sources, when combined or aggregated, will trigger com-prehensive and time consuming major source permitting require-ments. See Source Determinations for Certain Emission Units inthe Oil and Natural Gas Sector, EPA-HQ-OAR-2013-0685(August 18, 2015).1

EPA’s “clarification,” which is part of a package of proposedrules by EPA aimed at limiting emissions of methane and otherpollutants from sources in the oil and gas sector, puts forth twooptions for determining whether two or more properties in the oiland natural gas sector are “adjacent” for purposes of defining the“stationary source” in the pre-construction prevention from sig-nificant deterioration (PSD) and non-attainment new sourcereview (NNSR) programs, and “major source” for the Title V

operating permit program.According to EPA’s proposal, the “preferred” option would

define “adjacent” for the oil and natural gas sector in terms ofproximity and, specifically, whether the pollutant emitting activi-ties are located on the same surface site, or on surface sites thatare located within a quarter-mile of one another. EPA is, howev-er, co-proposing and taking public comment on an alternativeoption to define “adjacent” in terms of proximity or “functionalinterrelatedness,” an amorphous concept that EPA and state per-mitting authorities have used to aggregate otherwise discretesources of emissions.

Pertinent backgroundUnder the Clean Air Act (CAA), major sources of air emis-

sions are subject to the requirements of the PSD, NNSR andTitle V permit programs. Major source determinations focus onthe quantity of pollutants that a source emits or has the potentialto emit. If distinct sources of air emissions are treated as a singlesource by the permitting agency, the aggregated “source” cantrigger major source requirements. As it pertains to the oil andgas sector, there is ongoing debate and litigation among permit-ting agencies, industry and environmental groups regardingwhether, for example, oil and gas well pads should be consideredto be part of the same “source” as a central oil or gas processingfacility or compressor station. Triggering major source require-ments, and the attendant time and expense of major source per-mitting and compliance, can determine whether a particular proj-ect moves forward.

EPA’s CAA regulations provide three criteria that must eachbe satisfied before distinct sources of air emissions can be treatedas a single source. The sources: (i) must belong to the sameindustrial grouping (which is determined with reference towhether they have same primary Standard IndustrialClassification code); (ii) must be located on one or more contigu-ous or adjacent properties; and (iii) must be under common con-trol of the same person or corporate entity.2 In the original prom-ulgation and later application of these three factors, EPA hasbeen mindful of the direction the D.C. Circuit Court of Appealsprovided that the “source” for permitting purposes should com-port with the “common sense notion of a plant.” Alabama Powerv. Costle, 636 F.2d 323 (D.C. Cir. 1979).

With respect to the second regulatory criteria, EPA’s regula-tions do not define “adjacent.” Although “adjacent” is universallydefined in terms of spatial distance or proximity, EPA, throughinterpretive guidance and other agency determinations, hasadvanced the position that “functional interrelatedness” can beconsidered in determining whether sources are located on “adja-cent” properties. This expansive interpretation of “adjacent” hasallowed EPA to treat physically distant and distinct sources of airemissions as a single source, effectively reading the second regu-latory criteria out of the analysis.

In 2012, the Sixth Circuit issued its decision in SummitPetroleum Corp. v. EPA, which flatly rejected EPA’s position thatfunctional interrelatedness can be considered in determiningwhether sources are located on “adjacent” properties. See SummitPetroleum Corp. v. EPA, 690 F.3d 733 (6th Cir. 2012). The SixthCircuit, relying on the dictionary definition of “adjacent,” its ety-mology and case law interpreting the term in other contexts, con-cluded that the term “adjacent” is unambiguous and requiredEPA to apply the “ordinary, i.e., physical and geographical,

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February 2014 Page 17September 2015 Page 17

meaning of that requirement.” Summit, 690 F.3d at 735.EPA responded to the Sixth Circuit’s Summit decision with

the Summit Directive, wherein the agency announced that itwould not adhere to the court’s decision outside the SixthCircuit’s jurisdiction (i.e., outside Michigan, Ohio, Kentucky andTennessee). EPA’s Summit Directive was subsequently chal-lenged in the D.C. Circuit, which ruled that the directive violatedEPA regulations requiring national uniformity in implementingthe CAA. See National Environmental DevelopmentAssociation’s Clean Air Project v. EPA, 752 F.3d 999 (D.C. Cir.2014). The D.C. Circuit, in vacating the directive, observed thatEPA could amend its CAA implementing regulations to replacethe “adjacency” requirement with a functional interrelatednesstest.

EPA’s proposalEPA’s proposal states that it is intended, inter alia, to “resolve

the uncertainty that litigation over the Summit Petroleum sourcedetermination and resulting guidance has created for both per-mitting authorities and for owners/operators of regulatedsources.”3 To that end, EPA is proposing to clarify the definitionof “adjacent” used to determine the source to be permitted withinthe PSD, NNSR and Title V programs as it applies to the oil andgas sector. EPA believes that “the unique characteristics of thisindustry—such as the underground mineral rights versus surfaceland ownership, widespread operations and interconnectednessvia pipeline, etc.—warrant an industry-specific definition thatwill streamline the assessment of which operations should beconsidered to be on contiguous or adjacent properties.”4

As noted above, EPA has proposed two options for determin-ing whether two or more properties in the oil and natural gas sec-tor are “adjacent” for purposes of defining the “stationarysource” in the PSD and NNSR programs, and “major source” forthe Title V program. EPA’s first, and “preferred,” option woulddefine “adjacent” such that the source is similar to that in theNESHAP for this industry, Subpart HH, National EmissionsStandards for Hazardous Air Pollutants From Oil and NaturalGas Production Facilities (40 C.F.R. § 63.760). Under thisoption, pollutant emitting activities would be considered adjacentif they are located on the same surface site, or on surface sitesthat are located within a quarter-mile of one another, with “sur-face site” having the definition in 40 C.F.R. § 63.761 (any com-bination of one or more graded pad sites, gravel pad sites, foun-dations, platforms or the immediate physical location uponwhich equipment is physically affixed).5 EPA “prefer[s] thisoption because we believe that a definition that centers on a sur-face site is familiar to the industry and the regulators because ofthe current NESHAP requirements, so it closely represents thecommon sense notion of a plant for this industry category.”6

“Surface sites,” EPA explains, “that are not in close proximity toone another may be on a separate lease which may not align withthe common sense notion of a single plant.”7 With respect to thequarter-mile distance within which to consider multiple surfacesites as a single source, EPA notes that the distance is consistentwith guidance developed by several states and, further, that thelack of a prescribed distance has “generated significant confusionand uncertainty in the past.”8

Under EPA’s second option, pollutant-emitting activitieswould be considered “adjacent” if one of the following circum-stances apply: (1) the pollutant-emitting activities are separated

by a distance of a quarter-mile or more and there is an “exclusivefunctional interrelatedness”; or (2) the pollutant-emitting activi-ties are separated by a distance of less than one-fourth mile.9

EPA’s proposal explains that “[e]xclusive functional interrelated-ness might be shown by connection via a pipeline or othermeans, because of the physical connection between the equip-ment.”10 It further explains that “[o]ther examples of factors thatcould be assessed to determine interrelatedness include exclusivedelivery of product from one group of equipment to the other viatruck or train and facts such as whether one group of equipmentwould be able to operate if the other group of equipment was notoperating.”11 Under this approach, “EPA and states would makea determination of adjacency based on a consideration of theinterrelatedness of emitting activities in addition to the distancebetween them.”12

EPA will be accepting public comment on the proposal for 60days following its publication in the Federal Register. In additionto the proposal itself, EPA is requesting comment on a number ofrelated, subsidiary issues, including:

• How emission controls being proposed in separate EPAnotices may impact the EPA’s “preferred” option in this proposal.

• Whether states should be required to adopt the changes,once finalized.

• Whether it is appropriate to establish a specific distancewithin which to consider multiple surface sites as a singlesource, and if so, what that distance should be.

• Whether the center or some other feature, such as the bound-ary of the surface site, is more appropriate to use as the startingpoint of the measurement radius when determining the source.

With respect to the second option, the advantages and disad-

Page 18: The PIOGA Press - September 2015

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vantages to this approach, whether there is need to further define“exclusive functional interrelatedness” for this sector to provideadditional clarity to regulators and the regulated community, andthe environmental benefits or harms that might result from thisapproach.

In addition to monitoring, and commenting on, EPA’s propos-al, operators in Pennsylvania will want to keep tabs how thePennsylvania Department of Environmental Protection reacts toEPA’s proposal to define “adjacent.” The department’s currentGuidance for Performing Single Stationary SourceDeterminations for Oil and Gas Industries, No. 270-0810-006(October 6, 2012), acknowledges that the “plain meaning” of theterm “adjacent” is dispositive when determining whether station-ary sources are located on adjacent properties and adopts a quar-ter-mile rule of thumb, under which properties located one-fourthof a mile or more apart are presumed not to be adjacent. Thedepartment, however, notwithstanding its guidance (and plain

language of the regulations), has allowed “functional interrelat-edness” to increasingly permeate its single source analyses,resulting in a number of adverse determinations that distinctsources of air emissions located a quarter-mile or more apartshould be treated as a single source. ■

1 EPA’s proposal, pending publication in the Federal Register, is available at www.epa.gov/airquality/oilandgas/pdfs/sd_prop_081815.pdf. 2 See 40 C.F.R. § 52.21(b)(6); 40 C.F.R. § 71.2.3 EPA’s proposal, www.epa.gov/airquality/oilandgas/pdfs/sd_prop_081815.pdf.,at 28.4 Id. at 29.5 Id. at 30-31.6 Id.7 Id. at 318 Id. 9 Id. at 33-3410 Id. at 33.11 Id.12 Id.

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Page 19: The PIOGA Press - September 2015

February 2014 Page 19September 2015 Page 19

Thompson to introduce bill protecting private mineral rights in Allegheny National Forest

Pennsylvania Congressman Glenn “GT” Thompson hasannounced plans to introduce the “CooperativeManagement of Mineral Rights Act.” The legislation per-

tains to the Allegheny National Forest (ANF) and private owner-ship of mineral rights in national forests across the nation. Itwould repeal an existing statute which allows the U.S. ForestService to create rules relating to development of privately heldmineral rights in the ANF.

Plans for the legislation were announced at a press conferenceon August 21 near the Drake Well Museum, site of the nation’sfirst commercial oil well.

“I will be introducing the Cooperative Management ofMineral Rights Act in the House in the coming weeks,” saidThompson, chairman of the House Agriculture Subcommittee onConservation and Forestry, and a member of the House NaturalResources Committee. “Federal courts have ruled that the U.S.Forest Service lacks regulatory authority over privately held min-eral rights. This legislation corrects existing law and is consistentwith the findings of the courts, which ruled against new federalregulations and further attempts to shut down activity in theAllegheny National Forest,” added Thompson.

Thompson was joined at the press conference by KevinMoody, PIOGA general counsel.

“I commend Congressman Thompson for authoring this legis-lation,” Moody said. “Our national forests are not national parks.The oil and gas industry has been an essential part of northwest-ern Pennsylvania since the drilling of the first oil well in 1859.This legislation would make sure the use of private mineralrights is a cornerstone of our region’s economic future. Workersfor close to 100 oil and gas companies depend on drilling in theAllegheny National Forest for their livelihoods. This legislationwould give them the security of knowing new regulations couldnot limit expansion or put them out of work.”

The Allegheny National Forest covers more than 500,000acres and is located in Elk, Forest, McKean and Warren countiesand is the heart of Pennsylvania’s shallow oil industry. More than93 percent of the ANF’s subsurface is privately owned.

PIOGA—and before that one of our predecessor organiza-tions, the Pennsylvania Oil & Gas Association (POGAM)—suc-cessfully fought a multi-year legal battle to protect the right ofoperators to reasonable access to their private subsurface hold-ings in the ANF. As part of a sue-and-settle arrangement withenvironmental organizations in 2007, forest managers imposed amoratorium on new oil and gas development and attempted torequire costly and time-consuming environmental analyses forany new activity. The association prevailed in a string of federalcourt rulings that declared the Forest Service was attempting toexercise authority it did not have, culminating in December 2013when the U.S. Court of Appeals for the Third Circuit refused arequest by environmental groups to rehear the case. In May2014, the Forest Service agreed to reimburse more than a half-million dollars of the association’s legal fees (about a quarter ofwhat was actually spent).

After the August 21 press conference, Thompson told TheTitusville Herald: “What we’re doing is codifying what the fed-eral court upheld in their opinion,” he said. “Federal courts haveruled that the U.S. Forest Service lacks regulatory authority overprivately held mineral rights. This legislation corrects existing

law and is consistent with the findings of the courts, which ruledagainst new federal regulations and further attempts to shut downactivity in the Allegheny National Forest.”

Thompson, whose Fifth Congressional District includes all ofthe ANF, said he intends to recruit as many members ofCongress as possible to make this a bipartisan bill. ■

Shale gas wastewater treatmentand disposal study updated

In 2012 the Ben Franklin Shale Gas Innovation &Commercialization Center (SGICC) commissioned a studyon the status of wastewater produced in Pennsylvania. Now,

three years later, SGICC is updating the report, not only becauseof the slowdown in the drilling process across theCommonwealth, but also due to the rapid change the shale indus-try has made in management techniques for wastewater fromshale gas and natural gas liquids (NGL) extraction.

SGICC hired Wunz Associates, LLC to undertake the study asa follow up to the 2012 effort. An exhaustive search of theDepartment of Environmental Protection wastewater reportingrecords was undertaken, coupled with discussions with leadingcompanies treating wastewater for the industry.

The most significant finding in the 2015 report is that vol-umes classified as “produced water” exceeded those classified as“frac fluid” in 2014. Bill Hall, SGICC director explains, “Thishas occurred largely due to the slowdown in drilling and fractur-ing of wells by the industry and could reverse again in the futurewhen natural gas and NGL prices rebound and drilling picks upagain. Additionally, the amount of produced water is likely todecline over time since it is generated in proportion to theamount of gas or NGLs a well is producing, and that tends todrop off fairly rapidly after the initial years of production.”

Hall also stressed that the majority of the wastewater generat-ed as both “produced” and “frac fluid” is recycled by the indus-try. DEP records indicate more than 91 percent of the water isrecycled by being used in a future completions project.Recycling is typically done after the water is partially treated toremove solids and other unneeded constituents.

“There may be a point in the future where total frac flowbackfluid and produced water volumes do exceed the total volume ofwater used to fracture wells in the state. But that point has notbeen reached yet,” noted Hall. “The industry continues to lookfor innovations in the area of shale wastewater treatment and dis-posal to address future challenges.”

See the new 2015 report, as well as the 2012 version, atwww.sgicc.org/research—reports.html. In addition to the WunzAssociates report is a report by Eureka Resources, LLC regard-ing its Standing Stone treatment facility operations in BradfordCounty and published in SPE International in 2015. ■

Page 20: The PIOGA Press - September 2015

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Safety Committee CornerSafety Committee CornerLower your ‘MOD’and get those jobsBy Michael G. LukartEast Coast Risk Management

As competition for prime contracts gets tighter, you needto make sure your company is a “shining star” when itcomes to contractor prequalification. One of the bench-

marks considered by primary contractors is your ExperienceModification Factor, or MOD. This simple number tells themvolumes about your operations.

An Experience Modification Factor is a multiplier applied toyour workers’ compensation premium as an incentive to controlemployee accidents and workers’ compensation claims. It isbased on both frequency and severity of accidents and claimspaid over a given time period and is determined by third parties,such as the state’s Bureau of Workers’ Compensation and insur-ance companies. In addition to impacting workers’ comp insur-ance premiums, it can have a profound impact on a subcontrac-tor’s ability to secure jobs. If your MOD is greater than 1.0, forexample, your company will be considered too great of a safetyrisk and you will lose opportunities.

The good news is that your company can do a lot to establisha desirable MOD and to maintain it. Consider these two compa-ny success stories:

A commercial utility contractor with more than 40 employeeshad a MOD of 1.6, resulting in the loss of business and revenues.Its workers’ comp premiums were 64 percent higher than theaverage contractor in the industry. Four years later, after applying

a strong focus to improve safety and claims management pro-grams, the company’s MOD is 0.803 and its premiums are 20percent less than the average contractor. The company is nowenjoying increased business opportunities and can bid jobs atmore competitive rates.

This company was a provider of support services to the oiland gas industry with more than 80 employees and offices in twostates. With a MOD over 1.2 and inadequate safety programs andtraining initiatives, it had a failing grade in ISNetworld as well asother subcontractor prequalification sites and was shut down byits largest, most important client. After getting help to developand implement all the necessary programs, the company’s gradewas improved, a mistake in its MOD was corrected, and it rein-stated with the client and was also able to pursue additionalopportunities with that client as well as others in the industry.

If they can do it, so can you.How to improve your MODOne of the most effective means for managing your MOD is a

robust safety program. This begins with a strong commitmentfrom ownership. Your company leaders must set the tone andestablish the culture. If safety is truly a priority of theirs, it willbecome the theme song at every level of the organization.Owners who are unwilling to change or who are focused solelyon productivity will push safety aside and will have no successbringing down the company’s MOD.

An effective safety program is founded on clear policies that

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February 2014 Page 21September 2015 Page 21

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are consistently enforced and supported with regular safety meet-ings and training sessions. If you do not have a safety expert onstaff, seek out a qualified consultant who will conduct a compre-hensive loss trending analysis to identify those losses and issuesthat are driving the company’s claim frequency and severity.Those findings will allow you to develop and implement anappropriate accident prevention program.

Hiring and performance management are also key to keepingyour MOD low. Injury prevention and injury management are100-percent controllable employee expenses. Hiring the rightpeople, training them well and managing their performance willgo a long way toward preventing accidents and injuries that driveup your MOD. Remember, too, that your MOD is not based juston the frequency of claims, but is also influenced by the severityof claims. Even a single large claim can dramatically increaseyour MOD. This is another reason to remain diligent in trainingand enforcing safety policies.

While we are talking about training the workforce, let’s notforget about training your supervisors. Developing standardizedoperating procedures and clear, enforceable policies is essentialto improving your operations. But these will not be effectiveunless you train your supervisors in key areas such as hiring,accident investigation, workplace inspections, audits, etc.

It also helps to know your insurance company. Unfortunately,many insurance company claim professionals don’t fully under-stand the issues surrounding an employer’s MOD and makeclaim-related decisions that negatively affect your results.

These steps will not only help lower your MOD, but they willestablish a more productive and injury-free workforce that willgive your business a competitive advantage, making it much

more attractive to customers.The bottom line is clear: you can control your MOD.

Companies that make a diligent effort to reduce their MOD tothe lowest possible level know what it takes to get those primejobs. ■

Michael G. Lukart, CSP, CWCA, is President/CEO of East CoastRisk Management in North Huntingdon. He can be contacted [email protected].

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Page 22: The PIOGA Press - September 2015

Page 22 The PIOGA Press

PIOGA’s Pipeline and Gas Market Development (PGMD)Committee has been broadening its areas of interest tofocus on ways of expanding markets for Pennsylvania’s

abundant natural gas supplies. As part of that, the group has beenforming subcommittees that deal with issues such as gas-electriccoordination and natural gas-powered vehicles and their infra-structure.

The PGMD Committee is now creating two more subcommit-tees:

• Manufacturing and Large Volume Consumer, whichaddresses the promotion of new and existing manufacturing andlarge end-user consumption and utilization of natural gas in allforms. The subcommittee—led by Tim Wetzel of BridgeWorks,LLC and Cristina Jorge Schwarz of Apex Companies, LLC—also intends to promote the effective use of pipeline delivery, uti-lization and reliability considerations.

• Public Affairs, led by Dan Garcia of Leech Tishman, whichwill work to provide consistent, strategic public relations toaddress industrial, community and governmental concerns withnatural gas development. The subcommittee’s outreach effortswill include media relations and grassroots campaigns to educatecommunity stakeholders and locally elected officials, and, inconcert with the Legislative and Manufacturing subcommittees,work on legislation targeted to increase the use of natural gasand incentives for natural gas consumption and development.

In addition to promoting accelerated use of natural gas, thefull PGMD Committee is responsible for monitoring develop-

ments at the Pennsylvania Public Utility Commission andFederal Energy Regulatory Commission. The committee reviewspipeline and utility tariffs and pipeline open seasons affecting themovement of natural gas, recommending and managing interven-tions in rate cases and developing producer policy positions onnatural gas marketing matters.

If you are interested in participating in any of the subcommit-tees or the Pipeline and Gas Market Development Committeeitself, please email Tracy Zink at [email protected]. The subcom-mittees generally meet by conference call, while the full commit-tee convenes on the first Thursday of the month at PIOGA’sWexford office. The committee also hosts occasional educationalfield trips and social events.

Other committee opportunitiesPIOGA’s other committees always are looking for member

participation too. Here’s a brief look at what they do:• The Environmental Committee is responsible for monitor-

ing federal, state and local environmental regulatory develop-ments that affect drilling, site preparation and reclamation, andproduction operations. The committee frequently provides publicpolicy recommendations and industry guidance. Subcommitteesdeal with erosion and sediment control, air quality, water andwaste, and well construction.

• The Safety Committee provides a forum to exchange bestpractices and to disseminate those practices to the oil and gasindustry within Pennsylvania. The committee serves as a means

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Page 23: The PIOGA Press - September 2015

February 2014 Page 23September 2015 Page 23

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for members and government agenciesto work together to improve the per-formance of the industry in mattersrelating to safety.

• PIOGA’s Legislative Committeeis responsible for actions to be taken onlegislative issues and assists in develop-ing the association’s legislative agenda.The work of the committee includesreviewing legislation being introducedand recommends actions to be taken onlegislative issues; contacting legislatorsand encouraging members to be activewith regard to legislative issues; assist-ing with lobby days and other educa-tion and fundraising events; developingcomments on proposed legislation; andcommunicating with PIOGA memberson legislative issues that impact theindustry.

• The Tax Committee monitors andreports on federal, state and local taxdevelopments. The committee alsohosts the annual Oil and Gas Tax andAccounting Update seminar.

If any of these committees mesheswith your area of interest and youwould like to share your expertise, con-tact Tracy Zink ([email protected]). ■

“Unconventional Gas Powering Our Future” was the theme of publishing companyPennWell Corporation’s Power Gen conference and exposition. This inaugural event was held in Columbus, Ohio, August 18-20 and highlighted content pertaining to midstream to natural-gas-fired power generation within the Appalachian Basin. The PIOGA Pipeline and Gas Market Development Committee provided free expo passes to anyone wishing toattend, as this downstream sector interests a great portion of the committee’s currentgas-electric interoperability stakeholders. PIOGA’s Joyce Turkaly participated on the“States Perspective” panel alongside Shawn Bennett of the Ohio Oil & Gas Association and Dale Arnold of the Ohio Farm Bureau Federation, and spoke to the gas and electric interoperability progress made by the association thus far. Roughly 1,400 people attended the event. Assisting with PIOGA booth traffic during the event were Sandy Spencer,Appellation Pre-Fab LLC , and Tim Wetzel, Bridgeworks LLC, both pictured above.

Page 24: The PIOGA Press - September 2015

Page 24 The PIOGA Press

Announcing thePIOGA Buyers’ Guide

PIOGA is partnering with Strategic Value Media—a leadingnationwide provider of print and digital media solutions tonational, state and local trade and membership associa-

tions—to launch the online PIOGA Buyers’ Guide.The Buyers’ Guide features updated and expanded company

and product listings, in addition to other valuable informationrelating to the oil and gas industry. The guide provides users with

Do you have a Facebook or LinkedIn account? If so, youare no doubt familiar with the concept of having yourown “connections” or “friends” that you can keep up to

date with. With the new PIOGA member management systemyou now have the ability to create your own association connec-tions.

Search for a contact in the PIOGA membership and once youfind them, click on the link and their “business card” will dis-play. Then you see Add Connection. Your contact will get amessage that you would like to connect with them, and whenthey “accept” your invitation they will now be a connection ofyours.

When you go to your profile area—under My Profile—youwill see the Connections link that will show you all your directconnections! ■

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Job and internship fair

The Fall Western Pennsylvania Collegiate Job & InternshipFair sponsored by the Western Pennsylvania Career Services

Association, an independent nonprofit consortium of career serv-ice professionals representing 46 member colleges, will takeplace October 14 at the Monroeville Convention Center. Thisevent provides opportunities for oil and gas companies alongwith ancillary members such as environmental firms to recruitalumni and college students. More than 100 employers and morethan 1,000 students and graduates are expected to attend therecruiting event. Employers interested in participating shouldvisit www.westpacs.org or contact Kristen Ritter [email protected]

Membership system how-toOver the past few months, we have been explaining differ-

ent facets of PIOGA’s new membership management systemand will be continuing to do so in the coming months. Here’s arundown of the articles so far:

• “PIOGA launching new online membership system”—June

• “Navigating the new membership system and committeeportal pages”—July

• “Managing the company account”—AugustWe encourage you to review the articles. Past issues of

The PIOGA Press can be found on our website atwww.pioga.org/resources/newsletter.

To access the system, click on “Members Only” at the topof our homepage, www.pioga.org. If you have difficulty withlogging in or any other part of the system, please contactDanielle Boston at [email protected].

Create your PIOGA connections in the new membership system

an efficient way to browse for goods and services and offersPIOGA’s Service Provider and Professional Firm membersexceptional visibility by showcasing their products and servicesto a targeted, industry-specific buyers’ group.

We encourage you to take advantage of this exceptionalopportunity to highlight what your company has to offer. Tolearn more about advertising your products or services in theBuyers’ Guide, email [email protected]. AStrategic Value Media representative may be contacting you inthe future. Please know they are working in partnership withPIOGA.

This new member benefit will be formally launched atPIOGA’s 2015 Eastern Oil and Gas Conference and Trade Showin October and will replace our existing online Service Directory.For a demo, visit paoilgasbuyersguide.com/beta. ■

Page 25: The PIOGA Press - September 2015

September 2015 Page 25

Other legislation overshadowedduring state budget stalemate

The stalemate over the state budget means many otherpieces of legislation of interest to the industry appear tobe on hold, at least for the time being. Pennsylvania state

government is now in its third month without a budget.Democratic Governor Tom Wolf, who made a natural gas sev-

erance tax a cornerstone of his budget proposal, in late Junevetoed a spending plan crafted by the legislature’s Republicanmajority that omitted the severance tax along with any other taxincreases. Wolf proposed a severance tax of 5 percent of thevalue of the gas plus 4.7 cents per Mcf. The 4.7-cent portionincluded a floor of $2.97/Mcf, regardless of how low the marketprice goes. During post-veto negotiations, the governor offered toremove the $2.97 floor price, but GOP leaders continued tospurn the tax in its entirety.

The legislative slowdown caused by the budget impassemeans that several bills on PIOGA’s radar have not come up forconsideration. Among legislation the association anticipatescould yet see action this fall are reform of the Pennsylvania OneCall System and pipeline safety, a proposal encouraging use ofacid mine water for hydraulic fracturing, a bill providing guid-ance on blanket recording and indexing of oil and gas leases bycounty recorders of deeds, and royalty owner rights measures.

An issue of some contention last year was legislation transfer-ring authority for the One Call program from the Department ofLabor and Industry to the Pennsylvania Public UtilityCommission. Oil and gas gathering lines have been exempt frommandatory participation in the call-before-you-dig program, andPIOGA was able to secure a compromise that retained the exclu-sion for gathering lines serving conventional wells while mandat-ing participation for the higher-pressure lines tied to unconven-tional wells. This year’s House Bill 445 retains that compromiseposition, but there have been indications that the PUC will fightto have all gathering lines included as the bill moves.

In a related matter, PIOGA expects legislation to be intro-duced and acted on giving the PUC safety jurisdiction overunconventional gathering lines located in what are known asClass 1 rural areas. Such pipelines currently are not regulated byeither the PUC or the Federal Energy Regulatory Commission.Last session, the issue was rolled into the legislation that alsoaddressed PA One Call matters.

One piece of PIOGA-supported legislation that has seen con-siderable action this year is Senate Bill 875, which encouragesthe industry to use acid mine water—a legacy of Pennsylvania’scoal-mining history—by limiting potential liabilities for produc-ers who use mine water in the drilling process. After winningSenate approval in June, the bill made its way through the Houseand was amended slightly in a floor vote before the full Housebefore being sent back to the Appropriations Committee (JulyPIOGA Press, page 21).

Another bill that has already earned one chamber’s approvaland could see action this fall is HB 621, which sets standards forhow county recorders of deeds handle blanket assignments of oiland gas leases. The bill gives recorders the discretion to refusedocuments that assign 50 or more leases, require that the lessor’sname be indexed so property owners can more easily track whoholds their mineral rights and allows some counties to charge a

fee for each lease that must be indexed (June PIOGA Press, page30). PIOGA is neutral on the legislation.

PIOGA does not favor a pair of Senate-passed measures pur-ported to protect the rights of property owners. Sponsored bySenator Gene Yaw (R-Lycoming County), SB 147 allows royaltyowners the opportunity to inspect the producer’s records to verifyproper payment. Information provided by the gas companywould be considered confidential. In addition, the bill requiresthat royalty payments must be made within 60 days of produc-tion. SB 148, meanwhile, prohibits a producer from retaliatingagainst a royalty owner by terminating the lease agreement orceasing development because a landowner questions the accuracyof the royalty payments (February PIOGA Press, page 24).

PIOGA also contends that HB 1391 is a case of the stateimproperly inserting itself into the contractual relationship. Themeasure makes illegal for producers to use post-productiondeductions to lower royalty payments below the 12.5-percentlevel mandated by the Guaranteed Minimum Royalty Act of1979. The bill allows courts to award triple damages in caseswhere it is determined the producer acted willfully in failing topay the 12.5-percent minimum (July PIOGA Press, page 21). ■

New Legislative Committee vice chairWe are pleased to announce that Kevin

Gromly of Vorys, Sater, Seymour and PeaseLLP is now vice chairman of PIOGA’sLegislative Committee. The committee ischaired by Ben Wallace of Penneco OilCompany.

Page 26: The PIOGA Press - September 2015

Page 26 The PIOGA Press

The Environmental Protection Agency unveiled proposedregulations on August 18 aimed at cutting methane emis-sions from the oil and gas sector by 40 to 45 percent over

the next decade from 2012 levels.The rules would apply to new or modified sources of oil and

natural gas and require energy companies to find and repairleaks, capture natural gas during the completion of hydraulicallyfractured wells, and limit emissions from pneumatic pumps andseveral other types of equipment.

The EPA announced it would take comments on the proposalsfor the next 60 days and hold public hearings.

The American Petroleum Institute said the agency’s proposalfor additional methane regulations on oil and gas wells and trans-mission are duplicative, costly and undermine America’s compet-itiveness. The industry has already led the significant reductionin methane through innovation and existing regulations, accord-ing to API President and CEO Jack Gerard.

“The oil and gas industry is leading the charge in reducingmethane,” Gerard said. “The last thing we need is more duplica-tive and costly regulation that could increase the cost of energyfor Americans. Even as oil and natural gas production hassurged, methane emissions from hydraulically fractured naturalgas wells have fallen nearly 79 percent since 2005, and CO2emissions are down to 27-year lows. This is due to industry lead-ership and significant investments in new technologies.”

EPA’s own analysis shows that methane emissions fromhydraulically fractured natural gas wells have fallen dramatically.Total methane emissions from natural gas systems are down 11

percent since 2005—a direct result of industry innovation at thesame time production has increased significantly, according toAPI.

“API supports a commonsense regulatory approach that buildson cost-effective controls already required by EPA for newequipment,” Gerard said. “Combined with smart, voluntaryefforts for existing sources, this approach will continue to lowermethane emissions. To avoid undermining American competi-tiveness, we urge the EPA to coordinate its efforts and not addduplicative rules.”

Barry Russell, president and CEO of the IndependentPetroleum Association of America, also had harsh words for theproposal.

“The administration is proposing a costly and complicatedregulatory program for few environmental benefits,” Russell said.“The unnecessary costs and added uncertainty resulting from theadministration’s proposals could inflict more pain on the menand women who work in the oil and gas industry—at a timewhen market forces are already creating economic challenges.”

The EPA started the effort in 2012 when it required shale gasoperators to stop venting or flaring gas from wells and insteadimplement “green completions”—a process of capturing the gasthat would have otherwise been burned or released. Operatorswere given until January to comply.

The suite of regulations announced August 18 build on thoserules and extends the requirement to hydraulically fractured oilwells, new equipment and modified equipment at compressorstations, transmission facilities and processing plants. It also

EPA proposes rules to reduce methane emissions from oil and gas industry

Page 27: The PIOGA Press - September 2015

February 2014 Page 27September 2015 Page 27

North Dakota court issues eleventh-hour halt to besieged WOTUS rule

The U.S. District Court for the District of North Dakota onAugust 27 issued an eleventh-hour preliminary injunctionof the rule redefining the scope of federal jurisdiction

under the Clean Water Act (CWA)—the “Waters of the UnitedStates (WOTUS) rule.”

Although the U.S. Environmental Protection Agency and theArmy Corps of Engineers have repeatedly stated that the agen-cies intended their joint rulemaking to merely clarify the scopeof EPA’s jurisdiction under the CWA, the WOTUS rule has beenwidely criticized as an unprecedented expansion of federal juris-diction. Multiple legal challenges to the rule have been filedsince its June 29 publication in both district and circuit courtsacross the country, including the challenge by the state of NorthDakota and a coalition of other states and state agencies.

After finding that jurisdiction properly rested in the districtcourt, Judge Erickson held that it “appears likely” EPA exceededits statutory authority under the CWA and failed to comply withthe Administrative Procedure Act in what internal agency docu-ments have revealed to be “a [rulemaking] process that is inex-plicable, arbitrary and devoid of a reasoned process.” Findingthat, under a balancing of harms, “the risk of harm to the Statesis great and the burden on the Agencies is slight,” the court pre-liminarily enjoined the WOTUS rule one day before its effectivedate.

The decision raises several important questions surroundingthe scope of the preliminary injunction, the district court’s juris-diction to issue it in the first instance, and the implications forthe plethora of ongoing cases at both the district and circuit courtlevels challenging the WOTUS rule.

Aside from those procedural issues, Judge Erickson’s opinion

is the first judicial signal on the substantive vulnerabilities of therule when put through close analysis with Justice Kennedy’sopinion in Rapanos v. United States. Regulated parties withwater features that bear similarities to the tributaries and adjacentwaters described in Judge Erickson’s opinion can consider build-ing on the court’s analysis in an as-applied challenge to theWOTUS rule.

This summary was provided by PIOGA member Crowell &Moring. An in-depth review of the decision and surroundingissues can be found at www.crowell.com/NewsEvents/All/North-Dakota-Court-Issues-Eleventh-Hour-Halt-to-Besieged-WOTUS-Rule.

Update: On September 4, the same federal judge issued aclarification his injunction blocking the WOTUS rule appliesonly to the 13 states that sued to block it and was not nation-wide. “Because there are competing sovereign interests and com-peting judicial rulings, the court declines to extend the prelimi-nary injunction at issue beyond the entities actually before it,”Judge Erickson wrote. The EPA had maintained after Erickson’sinitial ruling that the injunction applied in only those 13 states,and said it had begun enforcing it elsewhere. The states hadargued that the judge made no geographical limitation in his rul-ing and it should apply everywhere. The states involved in thelawsuit with North Dakota are Alaska, Arizona, Arkansas,Colorado, Idaho, Missouri, Montana, Nebraska, New Mexico,Nevada, South Dakota and Wyoming. ■

adds pneumatic pumps to a list of regulated equipment at wellsites and compressors.

The EPA’s package of proposed regulatory actions, includingfact sheets addressing each component, can be found atwww.epa.gov/airquality/oilandgas/actions.html. ■

1500 Sycamore Rd., Suite 320Montoursville, PA 17754570-368-3040www.mctish.com

Additional OfficesAllentown, PAPittsburgh, PA

WINNERNortheast

2013

Guidelines for member news submissionsWe are happy to accept submissions of news items by PIOGA

member companies regarding new products or services, new facilities,expansions, open houses, promotions and hirings, and similar devel-opments. The news must apply specifically to the company’sPennsylvania operations and products/services for use in the oil andgas industry. Personnel items must be for Pennsylvania-basedemployees or whose territory includes Pennsylvania, except in thecase of top company officers.

All such items will be used in the newsletter on a space-availablebasis and are subject to editing for length, clarity and appropriateness.Submissions should be e-mailed to Matt Benson ([email protected])and the subject line should clearly state that it is PIOGA membernews. Material is due by the first of the month to be considered forthat month’s issue.

If you have an idea for a more in-depth article, particularly on tech-nical issues, please e-mail a description to Benson at the addressabove.

Page 28: The PIOGA Press - September 2015

Page 28 The PIOGA Press

PIOGA Member News

Turnout was a little lighter than usual for this annual PIOGA golf outing last month, but everyone still had a good time and the eventcontinued to benefit the work of PIOGA’s Environmental Committee. Our thanks go out to all who participated and sponsored the out-ing. A special thanks to Steve Rupert, who donated back his winning share of the 50-50 drawing.

Three from Babst Calland named Lawyer of theYear

Babst Calland attorneys Donald C. Bluedorn, Kevin J.Garber and Blaine A. Lucas were recently selected as2016 Best Lawyers® "Lawyer of the Year" in the

Pittsburgh area. Bluedorn was selected as 2016 Lawyer of theYear for Environmental Law and was also listed in the 2016 BestLawyers in America for Litigation – Environmental, and WaterLaw. Garber was selected as 2016 Lawyer of the Year for NaturalResources Law. He was also listed in the 2016 Best Lawyers inAmerica for Energy Law, Environmental Law, Litigation –Environmental, and Water Law. Lucas, meanwhile, was selected

as 2016 Lawyer of the Year for Energy Law as well as listed inthe 2016 Best Lawyers in America in Land Use and Zoning Law,Litigation – Land Use and Zoning, and Municipal Law.

Only a single lawyer in each practice area and designatedmetropolitan area is honored as the Lawyer of the Year, makingthis accolade particularly significant. These lawyers are selectedbased on particularly impressive voting averages received duringthe peer-review assessments.

Babst Calland also announced that 27 lawyers have beennamed to the 2016 Edition of Best Lawyers, the oldest and mostrespected peer-review publication in the legal profession.

LB Water announces new CEO

LB Water announced its Board of Directors has appointedShawn Pulford as the new Chief Executive Officer. For the lastfive years, Pulford has served as location manager and senior

Divot Diggers

2015

Page 29: The PIOGA Press - September 2015

September 2015 Page 29

New PIOGA members — welcome!

A&H Equipment Co.1124 McLaughlin Run Road, Bridgeville, PA 15017412-257-1160www.ahequipment.comService Provider—equipment supplier; vacuum truck services;vehicle repair, rental, sales

Cardno143 Roxbury Road, Newville, PA 17241717-205-3769cardno.comProfessional Firm—engineering, environmental/regulatory con-sultants, land services

Hightowers Petroleum Company3577 Commerce Drive, Middletown, OH 45005513-423-4272www.hightowerspetroleum.comEnd-User

Wellkeeper500 Bursca Drive, Suite 500, Bridgeville, PA 15017412-522-5106www.wellkeeper.comService Provider—remote well monitoring services, remote sitevideo surveillance

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.

location manager at LB Water’s Frederick, Maryland, location. Inhis previous twenty-nine years of waterworks industry experi-ence, he served as territory salesman for Kennedy Valve Co.,new product manager and regional sales manager for MuellerCo., and vice president of sales and marketing at A-1 Pipe Inc.

LB Water is a value-added distributor of waterworks-infra-structure products for the Mid-Atlantic region, including water-metering technologies, water infrastructure, sanitary sewers,storm sewers and environmental—erosion/stabilization.

Comtech Industries partners with EnvironmentalTank & Container

In response to increased oil and gas exploration and produc-tion, as well as meeting the growing demand for environmentallysound water conservation and reuse practices, Johnstown-basedEnvironmental Tank & Container (ETC) and Comtech Industries,Inc., located in Canonsburg, have entered into a partnership thatwill establish production of DYNA Tanks in WesternPennsylvania. This partnership will add jobs to the local econo-my by producing the segments necessary for a complete tank inless than one week. The benefit to producers will be increasedwater storage availability utilizing the revolutionary, relocatabletank system for water storage, treatment, reuse and transfer.

ETC is a leading manufacturer of above-ground impound-ments, frac tanks, mud tanks, gas busters and other strategic oil-field equipment utilized by Marcellus producers. The proprietaryDYNA Tank provides a storage capacity of 1 million gallons ofwater contained within a 36-foot high, 72-foot pad footprint.

Mazzella Companies launches new website andonline catalog

Mazzella Companies invites users to explore its new websitend online technical manual/catalog atwww.mazzellacompanies.com. The site includes extensive tech-nical and product information to help customers understandMazzella's complete range of lifting solutions. Technical dataand product detail work together to provide a detailed overviewof the Mazzella Companies capabilities across a wide range ofindustries, including steel, construction, oil and gas, and automo-tive. Among the features are front load sheet forms for overheadcranes, engineered products and rigging hardware; a robustsearch function; enhanced video, news and events pages; Googlemaps; social media connectivity; and a comprehensive careerspage.

New Skelly and Low civil engineering director

Francis J. “Frank” Gally, III, P.E., has been promoted to theposition of Director of Civil Engineering for Skelly and Loy. Hewill oversee staff, projects and resources of the firm’s CivilEngineering Services Group, providing engineering, design andconstruction support services for municipal, water resources,acid rock drainage remediation, and land development projects.Gally has more than 17 years of public and private sector projectengineering experience involving land development design andpermitting, water resource permitting, mine permitting and recla-mation, environmental regulatory compliance, and brownfieldssite assessment, remediation and redevelopment. ■

Page 30: The PIOGA Press - September 2015

Page 30 The PIOGA Press

Chapter 78 rulemaking: Continued from page 1

Technical Advisory Board (TAB). The previous version of therulemaking was issued on April 4.

In the first of two major changes, DEP said it decided not toinclude noise provisions for unconventional operations becauseof the complex nature of the technical issues surrounding noisemitigation. Instead, the department plans to develop a best man-agement practices guidance document, which DEP said mayserve as the basis for future rulemaking on the topic. Industryhad argued that the noise provisions would not have been legalbecause they were improperly added too late in the rulemakingprocess.

DEP also removed the centralized storage tank portions ofboth Chapter 78 and Chapter 78a. Instead, off-site managementof all wastewater from oil and gas operations will be addressedunder the department’s existing residual waste regulations inTitle 25, Article IX. Off-site tanks built to handle wastewater willbe treated like impoundments, which will require separate resid-ual waste permits to build or operate.

Scott Perry, the DEP’s deputy secretary for oil and gas man-agement, said during a conference call to announce the finaldraft that most of the new changes were made for clarification.The agency had retained nearly all of the significant policy

changes it made this spring after considering public commentson a first draft, he said.

However, PIOGA’s Environmental Committee believes a sig-nificant part of what the department has labeled mere “clarifica-tions” actually make the proposed regulations worse. Many ofthe revisions in the redline document released by DEP appear tobe largely punitive, said one committee member who has beeninvolved crafting PIOGA’s response to the rulemaking, “justadding on without any balance or consideration of the cumula-tive impact of the rule.”

For example, PIOGA had serious concerns with how “othercritical communities” was defined in the April 4 version of therulemaking and the anticipated problems, particularly with whatare known as special concern species, which would occur asoperators used the Pennsylvania Natural Diversity Index (PNDI)database as part of the permit application process. While variousagencies undertake rulemakings for listing threatened and endan-gered species, the same is not true for special concern species.There is no public process for listing special concern species, noris there a method—scientific or otherwise—for how the PNDIdatabase is populated. As a result, what shows up on the receiptfrom using the PNDI tool can change daily, and so could anoperator’s obligations. Act 13 uses the term “other critical com-munities” and DEP has yet to explain who in the department hasthe experience, knowledge or expertise to have decided that allspecial concern species are “critical” as a matter of law.

Another concern in August 11 version of the rulemaking is afurther expansion of the list of “public resource agencies,” whichnow include local, county, state, and federal agencies, as well asplayground owners and water purveyors. Despite the fact thatthe legislature developed a clear and concise universe of entitiesto whom notice should be provided and from whom commentsmay be received regarding well permit applications, the draftfinal rule would include tens of thousands of new entities, nowcalled public resource agencies, in the process. This processrequires notice to these entities, who then have a right to providecomments for the department’s consideration, without any scope,limitation or standard according to which such comments shouldbe developed.

Among other notable changes found in the latest redline:• The area of review provisions related to abandoned and

orphaned wells added DEP authority to require additional meas-ures—undefined—on a case-by-case basis.

• Provisions were added to impose additional corrosion con-trol obligations, beyond Act 13, on tanks.

• Radioactive action plans will need to be developed for onsiteprocessing of fluids and cuttings.

• Existing freshwater ponds will need to be upgraded with lin-ers and fences.

• Borrow pits will now be counted as part of the earth distur-bance for conventional well sites, likely putting these underChapter 102 and ESCGPs.

All the details. A six-page summary of the latest revisions,along with a redline version of the draft final-form rulemaking, isavailable on the TAB page of DEP’s website(www.portal.state.pa.us/portal/server.pt/community/oil_and_gas_technical_advisory_board_%28TAB%29/18260). Look under theitems posted in conjunction with TAB’s September 2 meeting. ■

Page 31: The PIOGA Press - September 2015

September 2015 Page 31

Energy andNatural Resources

Page 32: The PIOGA Press - September 2015

Page 32 The PIOGA Press

$35.00

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$95.00

Natural Gas Futures Closing PricesAs of September 9

Month PriceSeptember 2015 $2.662November 2.746December 2.897January 2016 3.014February 3.011March 2.977April 2.848May 2.850June 2.883July 2.917August 2.930September 2.926

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Page 33: The PIOGA Press - September 2015

February 2014 Page 33September 2015 Page 33

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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Apr

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May Jun

Jun Jul

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Previous Year Currrent Year

Pennsylvania Rig Count

Dan Palmer - Crude Relationship Manager PA / NY

[email protected]

Purchasers of Light Sweet Paraffinic Crude Oil

www.amref.com814-368-1200

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Page 34: The PIOGA Press - September 2015

Page 34 The PIOGA Press

Bull Run Energy LLC 3 8/6/15 123-47807 Warren Warren City8/18/15 123-47806 Warren Warren City8/24/15 123-47805 Warren Warren City

Cabot Oil & Gas Corp 16 8/31/15 115-22042* Susquehanna Gibson Twp9/4/15 115-22043* Susquehanna Gibson Twp9/4/15 115-22048* Susquehanna Gibson Twp9/4/15 115-22044* Susquehanna Gibson Twp9/4/15 115-22045* Susquehanna Gibson Twp9/4/15 115-22049* Susquehanna Gibson Twp9/4/15 115-22050* Susquehanna Gibson Twp9/4/15 115-22051* Susquehanna Gibson Twp9/4/15 115-22046* Susquehanna Gibson Twp9/4/15 115-22047* Susquehanna Gibson Twp9/1/15 115-22017* Susquehanna Harford Twp9/1/15 115-22022* Susquehanna Harford Twp9/1/15 115-22018* Susquehanna Harford Twp9/1/15 115-22019* Susquehanna Harford Twp9/1/15 115-22020* Susquehanna Harford Twp9/1/15 115-22021* Susquehanna Harford Twp

Cameron Energy Co 1 8/20/15 123-47814 Warren Sheffield TwpCatalyst Energy Inc 10 8/10/15 083-56655 McKean Lafayette Twp

8/3/15 121-45948 Venango Cranberry Twp8/5/15 121-45949 Venango Cranberry Twp8/10/15 121-45950 Venango Cranberry Twp8/12/15 121-45951 Venango Cranberry Twp8/17/15 121-45926 Venango Cranberry Twp8/19/15 121-45947 Venango Cranberry Twp8/27/15 121-45917 Venango Cranberry Twp8/31/15 121-45913 Venango Cranberry Twp9/3/15 121-45912 Venango Cranberry Twp

Chesapeake Appalachia LLC 2 8/14/15 015-23124* Bradford Tuscarora Twp8/10/15 131-20507* Wyoming Windham Twp

Chevron Appalachia LLC 7 9/1/15 051-24630* Fayette Luzerne Twp9/1/15 051-24631* Fayette Luzerne Twp9/1/15 051-24632* Fayette Luzerne Twp9/2/15 051-24621* Fayette Luzerne Twp9/2/15 051-24628* Fayette Luzerne Twp9/2/15 051-24629* Fayette Luzerne Twp9/2/15 059-26897* Greene Dunkard Twp

EQT Production Co 6 8/11/15 059-26780* Greene Washington Twp8/19/15 125-27587* Washington Amwell Twp8/19/15 125-27588* Washington Amwell Twp

8/19/15 125-27589* Washington Amwell Twp8/19/15 125-27590* Washington Amwell Twp8/19/15 125-27591* Washington Amwell Twp

JKLM Energy LLC 3 8/28/15 105-21851* Potter Sweden Twp8/28/15 105-21852* Potter Sweden Twp8/28/15 105-21853* Potter Sweden Twp

NTS Energy LLC 1 8/17/15 021-21207 Cambria West Carroll TwpRange Resources Appalachia 14 8/25/15 003-22340* Allegheny Fawn Twp

8/25/15 003-22341* Allegheny Fawn Twp8/25/15 003-22339* Allegheny Fawn Twp8/25/15 003-22334* Allegheny Fawn Twp8/26/15 003-22342* Allegheny Fawn Twp8/26/15 003-22355* Allegheny Fawn Twp8/28/15 125-27685* Washington Donegal Twp8/3/15 125-27673* Washington Jefferson Twp8/3/15 125-27674* Washington Jefferson Twp8/3/15 125-27676* Washington Jefferson Twp8/4/15 125-27671* Washington Jefferson Twp8/4/15 125-27672* Washington Jefferson Twp8/4/15 125-27675* Washington Jefferson Twp8/4/15 125-27686* Washington Jefferson Twp

Rice Drilling B LLC 4 8/25/15 125-27716* Washington N Bethlehem Twp8/25/15 125-27717* Washington N Bethlehem Twp8/25/15 125-27718* Washington N Bethlehem Twp8/25/15 125-27720* Washington N Bethlehem Twp

Southwell William R 2 8/24/15 123-47770 Warren Conewango Twp9/2/15 123-47769 Warren Conewango Twp

Stedman Energy Inc 2 8/5/15 049-25432 Erie Venango Twp8/18/15 049-25433 Erie Venango Twp

SWEPI LP 4 8/24/15 083-56742 McKean Wetmore Twp8/25/15 083-56741 McKean Wetmore Twp8/27/15 083-56744 McKean Wetmore Twp8/31/15 083-56743 McKean Wetmore Twp

SWN Production Co LLC 11 8/9/15 015-23211* Bradford Herrick Twp8/12/15 015-23196* Bradford Orwell Twp8/5/15 015-23206* Bradford Stevens Twp8/21/15 115-22041* Susquehanna Franklin Twp8/22/15 115-22038* Susquehanna Franklin Twp8/23/15 115-22037* Susquehanna Franklin Twp8/24/15 115-22036* Susquehanna Franklin Twp8/26/15 115-22040* Susquehanna Franklin Twp8/28/15 115-22039* Susquehanna Franklin Twp8/15/15 115-22008* Susquehanna Oakland Twp8/15/15 115-22009* Susquehanna Oakland Twp

Titusville Oil & Gas Assoc Inc 1 9/2/15 053-30623 Forest Harmony TwpUniversal Resources Holdings 5 8/20/15 123-47849 Warren Sugar Grove Twp

8/25/15 123-47853 Warren Sugar Grove Twp8/31/15 123-47851 Warren Sugar Grove Twp8/31/15 123-47852 Warren Sugar Grove Twp9/4/15 123-47850 Warren Sugar Grove Twp

Vantage Energy Appalachia II 6 8/5/15 059-26431* Greene Center Twp8/5/15 059-26432* Greene Center Twp8/5/15 059-26433* Greene Center Twp8/12/15 059-26564* Greene Washington Twp8/12/15 059-26565* Greene Washington Twp8/12/15 059-26566* Greene Washington Twp

Weldbank Energy Corp 2 8/3/15 123-47835 Warren Mead Twp8/10/15 123-47834 Warren Mead Twp

Wilmoth Interests Inc 3 8/13/15 083-56637 McKean Wetmore Twp8/24/15 083-56638 McKean Wetmore Twp8/31/15 083-56639 McKean Wetmore Twp

XTO Energy Inc 1 8/13/15 019-22447* Butler Butler Twp

Spud Report:August

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.

August totalsTotal wells 104Unconventional 70Conventional 34Gas 71Oil 33Combination oil/gas 0

Page 35: The PIOGA Press - September 2015

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.Rob Boulware, Seneca Resources CorporationCarl Carlson, Range Resources - Appalachia, LLCMike Cochran, Energy Corporation of AmericaDon A. Connor, Open Flow EnergyTed Cranmer, TBC ConsultingJack Crook, Atlas Resource Partners, LPRobert Esch, American Refining Group, Inc.Michael Hillebrand, Huntley & Huntley, Inc.Jim Hoover, Phoenix Energy Productions, Inc. Ron McGlade, Tenaska Resources, LLCJim McKinney, EnerVest Operating, LLCSteve Millis, Vineyard Oil & Gas CompanyGregory Muse, PennEnergy Resources, LLCJoy Ruff, Dawood Engineering, Inc.Stephen Rupert, Texas Keystone, Inc.Jake Stilley, Patriot Exploration 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 ServicesMatt 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 AdministrationChris Lisle ([email protected]), Manager of Finance Tracy 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 35September 2015 Page 35

PIOGA EventsAnnual Membership Meeting

September 29, Greensburg Hotel and Conference CenterInfo: www.pioga.org/events/category/pioga-events

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

Industry EventsIOGAWV Sports Weekend

September 25-26, Lakeview Resort, Morgantown, WVhttps://iogawv.com/2015-sports-weekend-registration

WVONGA Fall Meeting & Centennial CelebrationSeptember 29-October 2, Oglebay Resort, Wheeling, WVInfo: www.wvonga.com/Attend/Fall2015

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

OOGA Technical Conference and Oilfield ExpoNovember 4-5, Pritchard Laughlin Center, Cambridge, OHInfo: www.ooga.org/events

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

Calendar of Events

➤ More events: www.pioga.org

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Page 36: The PIOGA Press - September 2015

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