Appalachian Basin

OOGA Chief Lays Out the Facts on the Ron Ponder Show

Earlier today, Tom Stewart — executive VP of the Ohio Oil and Gas Association and our fearless leader here at EID Ohio — sat down for a quick chat with Ron Ponder, the popular host of  “Points with Ponder” on WHBC in Canton. Here’s a link to the full audio: http://www.youtube.com/eidohio#p/a/u/0/1B2iyPKowvE

Below are a few highlights from that interview, which focused on separating some of the myths from facts on the responsible development of the Utica Shale in Ohio – along with some bits about the history of fracturing technology in America, and the tremendous economic and employment potential of this homegrown Ohio resource:

Ponder: This [hydraulic fracturing] issue is not going to go away and we always cover it from both sides of the issue so give us an idea and tell us who you represent and what your position is on [hydraulic fracturing]?

Stewart: I represent the Ohio Oil and Gas Assocation and since the 1940s it has advocated on behalf of independent oil and gas produces – anybody that is engaged in the process of exploring for, developing and producing oil and gas resources in the state of Ohio. I also serve as the Executive Director of Energy in Depth — a grassroots campaign to get information out on the subjects we are talking about.

Ponder: So, now we can automatically assume that you are a pro drilling and a pro [hydraulic fracturing] person? Tell us why.

Stewart: I am pro American energy and pro jobs. I am pro reliable energy. Ohio has a fantastic  opportunity with Utica shall development to provide more of what we already have been providing for the state of Ohio which is locally produced resources – primarily natural gas and oil – that are being used here within our borders. With the development of major new technologies we are unlocking the key to a very dense formation that contains a lot of oil and gas but the technology was not there before to get it out and the industry has developed that technology and it will be a very meaningful event for the state of Ohio.

Ponder: You mentioned the Utica Shale but also the Marcellus Shale formations, all of the reports I have read indicate a vast amount of trapped oil and gas beneath the surface. Now the issue here is, I think, is [hydraulic fracturing], can you explain the fracking process to our listeners?

Stewart: Hydraulic fracturing is a process that has been in place since 1947. The first wells hydraulic fractured in the state of Ohio begin in 1952 or 1953. Since that time, there has been over 80,000 wells hydraulic fractured in the state of Ohio. The reason you would frack a well is, you attempt to create permeability – a pathway through resource rock where the permeability does not exist to allow oil and gas to move through the rock and into the well boar.  In a lot of reservoirs, like the Clinton sandstone right underneath your feet there in Stark County, there is a lot of oil and gas… that probably came from a source rock below it called Utica Shale. It’s trapped in the Clinton but the permeability characteristic does not allow it to move [freely] so you frack the well to open-up a pathway through the rock [which]allows the oil and gas to come to the well boar and produce in economic quantities.

Ponder: Now the governor just placed $1.7 million additional in the budget for the monitoring of these wells. How confident are you that the ODNR has the resources, the man power, the technology resources to adequately monitor the fracking ?

Stewart: Very confident. In Senate Bill 165 last year… which 118, out of 130 members of the general assembly voted for, so a large bi-partisan majority… doubled funding from the industry to the regulatory program and lock boxed, in matter of fact. In addition… the bi annual budget bill that was just enacted back in June, there was additional money that was brought over from the general revenue funds to give the resources to the oil and gas regulatory program to immediately staff-up and address a lot of specific issues that need to be addressed as this shale play gets up on its feet.

 I think that money will eventually be expected to be returned primarily through future severances taxes. So before shale became a huge issue, the resources were doubled-up to make sure they had the resources to protect the public trust.

In Senate Bill 165, which was probably  the most significant amendment to oil and gas law since the oil and gas chapter was created in 1960’s, there were specific issues addressed,  including the big one, which is well construction and two, frack disclosure where any citizen can go in and look at the public record on well completion reports and find out how the well was fracked, what constituents went into the frack, at what point they went into the frack and in what concentration. You can also get what is called the “frack chart,” which shows you pressure and rate over time. So if there is an incident that happened during that stimulation job out on a well [on a given] day it would show up on that chart. S0 so the complete record is there.

In addition, at the request of the Ohio Environmental Council, an amendment was added to Senate Bill 165 that provides for disclosure of all chemicals that are used [in the hydraulic fracturing process]… which are posted up on the ODNR website. That’s  in addition huge advances in enforcement authority that were given to the oil and gas regulatory program to make sure that if there was someone creating a problem, that they have the full tools underneath the law to pursue that person and seek corrective action and take action on behalf of the public trust.

All of that was validated by a peer critique that brought the environmental community and regulators from outside the state of Ohio, industryU.S. EPA and U.S. DOE . [They found] that  the oil and gas regulatory program, and specific to hydraulic fracturing revisions in Senate Bill 165… that the regulatory program was very well managed and was meeting its program objectives. It also had a lot to recommend to other states on how to do it right. This was signed off on by the environmental community.

Ponder: The person who did this presumably had no dog in this fight he is objective?

Stewart: It was an organization called STRONGER — The State Review of Oil and Natural Gas of Environmental Regulations — that brings stake holders together to actually do something constructive to improve the situation, instead of trying to destroy the situation. There were environmentalists involved, including an environmentalist from the Oil and Gas Accountability Project and Earthworks… The person that lead the review team is one of the founding members of Earthworks and the Oil and Gas Accountability Project. They signed off on that report saying that the Ohio program is meeting its program objectives and has a lot to recommend to other states.

Ponder: Let us quickly turn our attention to the subject of jobs. I have heard all kinds of projections on how many jobs that the drilling industry is going to increase here in the state of Ohio do you have an estimate?

Stewart: We can talk about that. Let us call it the oil and natural gas exploration and production industry. Drilling is part of that and fracturing is a one day event in the life of a well.  [Hydraulic fracturing] is a well stimulation process, it does not have anything to do with drilling and very little to do with production. It is just a well stimulation process to get a well to produce, then you’re done.

There is an economic study that came out which was conducted by Kleinhenz and Associates out of Cleveland. They do a lot of this kind of work for a variety of industries that updated a study that OOGEEP did in 2008… They estimate that if the Utica comes around, as many people expect it to do, that it could generate upwards of 204,000 jobs. That is a significant event for the state of Ohio.

Ponder: 204,000 jobs

Stewart: That is a lot of jobs.

Ponder: That is a lot of jobs.

To listen to the the interview, click HERE.

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