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The PIOGA Press - July 2016

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The monthly newsletter of the Pennsylvania Independent Oil & Gas Association.
24
July 2016 • Issue 75 The monthly newsletter of the Pennsylvania Independent Oil & Gas Association (Continues on page 3) regulations relating to unconventional wells, which should have removed pending revi- sions applicable to conventional operations proposed in 2013. Any regulatory revisions for conventional operations following Act 126 were required to be restarted with a new proposed rule and regulatory analysis explaining and justifying the need for the revisions. In an October 29, 2015 resolution, COGAC stated that DEP did not adequately separate and distinguish between the two sets of proposed regulations. As noted by COGAC, merely separating the rule into two chapters (78 and 78a) was inadequate to cure several Regulatory Review Act (RRA) deficiencies, including the department’s fail- ure to provide data, documents or evidence that describe the need for changes to the regulations; data on the cost of the proposed regulations to the conventional industry; and a regulatory flexibility analysis that consid- ers methods of reducing the impact of the revisions on small businesses. During the IRRC review process, two of the five commissioners agreed that the department did not provide enough information on the cost of the regulations, meet its burden to show that the revisions as applied to conventional operations are necessary or conduct the required flexibility analysis for small businesses. Act 52 responds to these and other concerns by requiring that the department submit information required by the RRA— including information related to the need for the regulations, the cost of the regulations and the effect of the regulations on small businesses—in a format solely dedicated to conventional wells, if and when the department determines that any revisions to the existing rules are necessary. Act 52 also creates the Pennsylvania Grade Crude Development Advisory Council. The Council will consist of 17 members, including two members apiece appointed by Governor Wolf from PIOGA, the Pennsylvania Independent Petroleum Producers and the Pennsylvania Grade Crude Oil Coalition. O n June 23, Governor Tom Wolf signed Act 52 of 2016, the Pennsylvania Grade Crude Development Act, formal- ly Senate Bill 279. Act 52 abrogates the Environmental Quality Board’s (EQB) revisions to the Chapter 78 regulations concerning conventional oil and natural gas wells and creates the Pennsylvania Grade Crude Development Advisory Council. In February, the EQB approved the Chapter 78 (conventional wells) and Chapter 78a (unconventional wells) Subchapter C revisions by a vote of 15-4. The Chapter 78 revisions would have altered or created new obligations for permit applications and renewals, water supply replacement, predrilling surveys and reviews, erosion and sediment control, emergency response plans, wastewater management, disposal of drill cuttings, site restorations, spills and releases, and production reporting. The revisions also included 31 different requirements for electronic applications, notifications and submittals. Act 52 applies only to the conventional regulations. The Chapter 78a unconventional regulations are currently undergoing review at the Pennsylvania Office of Attorney General and are expected to be published in late summer. In addition to abrogating the pending revisions to Chapter 78, Act 52 specifies that any future rulemaking concerning conven- tional wells must be undertaken separately and independently of unconventional wells and other subjects. Future rulemakings concerning conventional wells must include a regulatory analysis form submitted to the Independent Regulatory Review Commission (IRRC) that is restricted to the subject of conven- tional wells. Act 52 addresses the primary criticism of PIOGA and other trade associations and the Department of Environmental Protection’s Conventional Oil and Gas Advisory Committee (COGAC) regarding EQB’s Chapter 78 revisions. Specifically, Act 126 of 2014 required EQB to promulgate proposed regula- tions relating to conventional wells separately from proposed Governor Wolf signs Act 52 of 2016, erasing Chapter 78 revisions It’s time for the Pig Roast! . . . . . . . . . . . . . . . . 4 What do you know about GTL? . . . . . . . . . . . 4 Technical Conference agenda . . . . . . . . . . . . 5 Alert: EPA rule includes conventional wells . . 6 Court hears PIOGA’s Act 13 arguments. . . . . 8 Talking CNG internationally. . . . . . . . . . . . . . 11 Coming up: PGMD summer mixer . . . . . . . . 11 Committee acts on royalty legislation . . . . . . 12 ANF minerals bill advances in Congress . . . 12 Judge strikes down federal fracking rule. . . . 13 New PUC commissioner approved . . . . . . . . 14 Impact tax payments top $1 billion . . . . . . . . 14 Positive ruling in Clean Water Act case . . . . 16 Large increase for top OSHA fines . . . . . . . . 16 Taking our message on the road . . . . . . . . . 17 A much-needed victory for rural PA . . . . . . . 18 Tell us about your company . . . . . . . . . . . . . 19 Oil & Gas Trends . . . . . . . . . . . . . . . . . . . . . . 20 May Spud Report . . . . . . . . . . . . . . . . . . . . . 22 Calendar of Events . . . . . . . . . . . . . . . . . . . . 23 PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 23 Jean M. Mosites Michael K. Reer Babst Calland Authors:
Transcript
Page 1: The PIOGA Press - July 2016

July 2016 • Issue 75The monthly newsletter of the Pennsylvania Independent Oil & Gas Association

(Continues on page 3)

regulations relating to unconventional wells,which should have removed pending revi-sions applicable to conventional operationsproposed in 2013. Any regulatory revisionsfor conventional operations following Act126 were required to be restarted with a newproposed rule and regulatory analysisexplaining and justifying the need for therevisions.

In an October 29, 2015 resolution,COGAC stated that DEP did not adequatelyseparate and distinguish between the twosets of proposed regulations. As noted byCOGAC, merely separating the rule intotwo chapters (78 and 78a) was inadequate tocure several Regulatory Review Act (RRA)deficiencies, including the department’s fail-ure to provide data, documents or evidencethat describe the need for changes to theregulations; data on the cost of the proposedregulations to the conventional industry; anda regulatory flexibility analysis that consid-ers methods of reducing the impact of therevisions on small businesses. During the IRRC review process,two of the five commissioners agreed that the department did notprovide enough information on the cost of the regulations, meetits burden to show that the revisions as applied to conventionaloperations are necessary or conduct the required flexibilityanalysis for small businesses.

Act 52 responds to these and other concerns by requiring thatthe department submit information required by the RRA—including information related to the need for the regulations, thecost of the regulations and the effect of the regulations on smallbusinesses—in a format solely dedicated to conventional wells, if

and when the department determinesthat any revisions to the existing rulesare necessary.

Act 52 also creates the PennsylvaniaGrade Crude Development AdvisoryCouncil. The Council will consist of 17members, including two membersapiece appointed by Governor Wolffrom PIOGA, the PennsylvaniaIndependent Petroleum Producers andthe Pennsylvania Grade Crude OilCoalition.

On June 23, Governor Tom Wolf signed Act 52 of 2016,the Pennsylvania Grade Crude Development Act, formal-ly Senate Bill 279. Act 52 abrogates the Environmental

Quality Board’s (EQB) revisions to the Chapter 78 regulationsconcerning conventional oil and natural gas wells and creates thePennsylvania Grade Crude Development Advisory Council.

In February, the EQB approved the Chapter 78 (conventionalwells) and Chapter 78a (unconventional wells) Subchapter Crevisions by a vote of 15-4. The Chapter 78 revisions would havealtered or created new obligations for permit applications andrenewals, water supply replacement, predrilling surveys andreviews, erosion and sediment control, emergency responseplans, wastewater management, disposal of drill cuttings, siterestorations, spills and releases, and production reporting. Therevisions also included 31 different requirements for electronicapplications, notifications and submittals.

Act 52 applies only to the conventional regulations. TheChapter 78a unconventional regulations are currently undergoingreview at the Pennsylvania Office of Attorney General and areexpected to be published in late summer.

In addition to abrogating the pending revisions to Chapter 78,Act 52 specifies that any future rulemaking concerning conven-tional wells must be undertaken separately and independently ofunconventional wells and other subjects. Future rulemakingsconcerning conventional wells must include a regulatory analysisform submitted to the Independent Regulatory ReviewCommission (IRRC) that is restricted to the subject of conven-tional wells.

Act 52 addresses the primary criticism of PIOGA and othertrade associations and the Department of EnvironmentalProtection’s Conventional Oil and Gas Advisory Committee(COGAC) regarding EQB’s Chapter 78 revisions. Specifically,Act 126 of 2014 required EQB to promulgate proposed regula-tions relating to conventional wells separately from proposed

Governor Wolf signs Act 52 of 2016, erasing Chapter 78 revisions

It’s time for the Pig Roast!. . . . . . . . . . . . . . . . 4What do you know about GTL? . . . . . . . . . . . 4Technical Conference agenda . . . . . . . . . . . . 5Alert: EPA rule includes conventional wells . . 6Court hears PIOGA’s Act 13 arguments. . . . . 8Talking CNG internationally. . . . . . . . . . . . . . 11Coming up: PGMD summer mixer . . . . . . . . 11Committee acts on royalty legislation . . . . . . 12ANF minerals bill advances in Congress . . . 12Judge strikes down federal fracking rule. . . . 13New PUC commissioner approved . . . . . . . . 14Impact tax payments top $1 billion . . . . . . . . 14

Positive ruling in Clean Water Act case . . . . 16Large increase for top OSHA fines . . . . . . . . 16Taking our message on the road . . . . . . . . . 17A much-needed victory for rural PA . . . . . . . 18Tell us about your company . . . . . . . . . . . . . 19Oil & Gas Trends. . . . . . . . . . . . . . . . . . . . . . 20May Spud Report . . . . . . . . . . . . . . . . . . . . . 22Calendar of Events . . . . . . . . . . . . . . . . . . . . 23PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 23

Jean M. Mosites

Michael K. Reer

Babst CallandAuthors:

Page 2: The PIOGA Press - July 2016

Page 2 The PIOGA Press

Page 3: The PIOGA Press - July 2016

February 2014 Page 3July 2016 Page 3

Chapter 78 rules halted: Continued from page 1

The council will assist the department in: (1) examining andmaking recommendations regarding existing technical regula-tions promulgated under the Oil and Gas Act; (2) exploring thedevelopment of a regulatory scheme that provides for environ-mental oversight and enforcement specifically applicable to theconventional oil and gas industry; (3) providing written com-ments on new DEP policy that will impact the conventional oiland gas industry; and (4) reviewing and commenting on the for-mulation and drafting of all technical regulations proposed underthe Oil and Gas Act.

Beyond regulatory review and recommendations, the newcouncil is charged with promoting the long-term viability of theconventional industry, providing institutional support for the con-ventional industry by ensuring effective cooperation and commu-nication among governmental agencies and the academic andresearch community, and recommending appropriate measuresrelating to the promotion and development of the conventionalindustry. The council will also develop a plan to increasePennsylvania Grade crude oil production in an environmentallyresponsible way and form a joint working group with the depart-ment to explore and develop an environmentally responsible andeconomically viable production water management option.

DEP is in the process of developing Chapter 78 Subchapter Drevisions, which will address well drilling, casing, cementing,completion, operation, production, plugging and other subsurfaceactivities. Act 52 mandates that any proposed Subchapter D revi-sions applicable to conventional wells be undertaken separatelyand independently from those regulations the department propos-

“We are pleased that the bill has been passedand signed by Governor Wolf. This was a hard-fought battle and we applaud the members inthe General Assembly for their efforts to getthis legislation in front of the governor for sig-nature. It is our sincere hope that the Penn -sylvania Grade Crude Advisory Committee is avaluable advisory group to assist DEP in creat-ing effective regulations for environmental pro-tection without destroying this important indus-try in the process.”

—PIOGA President & Executive DirectorLou D’Amico

es for the unconventional industry. DEP has stated it anticipatesproposing revisions to Subchapter D in the fourth quarter of2016.

Both the unconventional and conventional industries shouldbe prepared for further legislative and regulatory developmentsthroughout 2016. ■

For more about developments described above, contact Jean M.Mosites (412-394-6468 or [email protected]) orMichael K. Reer (412-394-6583 or [email protected]).Also see the commentary by Representative Causer on page 18.

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Page 4: The PIOGA Press - July 2016

Page 4 The PIOGA Press

One of PIOGA’s most popular events is right around thecorner—the annual Pig Roast, Technical Conference andSports Outing. This year we’ve rearranged the format

and beefed up the conference portion to make it a better valuefor attendees.

The event takes place Tuesday and Wednesday, August 23-24, at beautiful Seven Springs Mountain Resort inChampion.

The technical conferencehas been moved to the firstday of the event and runsfrom 9 a.m. to 4 p.m. Of par-ticular interest is that we haveinvited a speaker from Shell todiscuss what the company’s cracker plant in Beaver County willmean for Pennsylvania’s oil and gas industry. Shell confirmedlast month that it has green-lighted the project, which will resultin 6,000 construction jobs, 600 permanent positions, and will useMarcellus and Utica gas to create 1.6 million metric tons annual-ly of polyethylene.

The conference will feature morning breakout sessions onsafety, operations and environmental topics, followed by a lunch-eon presentation on small unmanned aerial systems (known asdrones to most of us) in the natural gas and construction indus-tries. Afternoon breakout sessions will address safety, natural gasmarkets and utilization, and environmental matters.A detailed agenda accompanies this article. In all,we will bring you 26 speakers who will cover abroad range of useful and interesting topics!

Once the conference wraps up at 4 p.m., it willbe time to enjoy the popular pig roast and otherattractions. Check the PIOGA Events section of ourwebsite, www.pioga.org, for an up-to-the-minuterundown of what will be happening.

Wednesday will feature sporting clays and golftournaments on Seven Springs’ excellent facilities.As with the Pig Roast, it will be a great opportunityto kick back and do some networking.

Watch your email or check our website for com-plete details, including registration, sponsorshipopportunities and lodging. It’s going to be a greatevent—see you there! ■

What do you know about GTL?

Greater availability of compressed natural gas (CNG) and liquefied nat-ural gas (LNG) will increase markets for Pennsylvania natural gas.Finding less traditional burner tips for conventional production is a dif-

ficult task—or is it? Granted certain variables need to be present in order to guarantee a suc-

cessful project. However, both CNG and LNG will make up a larger portion ofthe U.S. transportation industry’s fuel supply in the future and is ready toaffect change in Pennsylvania now. Locally, the use of CNG and LNG as amotor fuel supports the state’s economy by utilizing a natural resource indige-nous to the Commonwealth. By utilizing Pennsylvania natural gas in this way,producers and developers support local business while creating both energyand economic security.

With this type of combined infrastructure, producers can directly choose tosell to an area where a station is being built or a gas-to-liquids (GTL) projectis sited, bypassing a more traditional utility outlet. As utilities’ transportationand metering charges become more of a burden to producers, further defray-ing or offsetting the commodity netback, certain producers are deciding todiversify downstream market opportunities.

In order affect change, there must be a discussion and evaluation first.PIOGA’s August 23 Technical Conference will feature a Natural Gas MarketUtilization track that restarts the discussion by revisiting the original Fischer-Tropsch technology that has been tested and deployed in various countriesseeking to convert natural gas to syngas (a mixture of carbon monoxide andhydrogen) into higher value products—anything from olefins to methanol tosynthetic diesel or even DME. In the years ahead, demand will be influencedby GTL fuel. To determine if your field gas can become the feedstock fortomorrow’s GTLs, consider attending the Dominion Field Services andPraxair afternoon presentations.

It’s time for the Pig Roast!

Page 5: The PIOGA Press - July 2016

February 2014 Page 5July 2016 Page 5

4 p.m. Technical Conference Adjourns

4-9 p.m. Pig Roast Dinner and More

Safety

10 a.m. — Energy Safety Passport (ESP)“GO” TrainingWayne Vanderhoof, CSP and Melissa Heike,RJR Safety, Inc.

11 a.m. — PA One Call: Benefits ofMembershipDan Lucarelli, PA One Call Systems, Inc.

Operations

10 a.m. — Improving the CapstoneMicroturbine to Better Suit the Oil & GasCustomerJerry Todd, Capstone Distributor, E-FinityDistributed Generation

11 a.m. — Making Engineered Completionsan Every Well EventKeith Rabb, C&J Energy Services

11:30 a.m. — Reinventing the VelocityStringMichael Kenworthy, MCS-Systems, a divisionof Technology Commercialization Corp.

Environmental

10 a.m. — Air Regulation Requirements inthe Marcellus/Utica Shale Region:Management Approaches and Case StudyThomas Seguljic, P.E., HRP Associates, Inc.

11 a.m. — Improving Frac WaterDisinfection While Lowering TreatmentCostsRaymond Roccon, Silver Creek Services andIn-situ Technologies

11:30 a.m. — PNDI and Chapter 78.15UpdatesBruce Snyder, Firecherry Consulting

August 23 Technical Conference Agenda9 a.m. Welcome

Lou D’Amico, PIOGA President & Executive Directory

9:15-10 a.m. The Shell Cracker—What it Means for PA and the Oil and Gas IndustryMichael Marr, Shell (invited)

10 a.m. - 12 p.m. Morning Breakout Sessions

12-1 p.m. LunchLunch Presentation: Applications of Small Unmanned Aerial Systems in the Natural Gas and Construction IndustryRick Celender, Civil & Environmental Consultants, Inc.

1-4 p.m. Afternoon Breakout Sessions

Safety

1 p.m. — Selection Criteria forthe Selectionof Confined Space Rescue TeamPaul Pantages, CSP, AM Health & Safety, Inc.

2 p.m. — OSHA’s New Crystalline SilicaRule: Are you Ready?Adele Abrams, Esq., CMSP, Law Office ofAdele L. Abrams PC

3 p.m. — Training Emergency Respondersabout Alternative EnergyPatrick Pauly, PA State Fire Academy, andTim Solobay, PA State Fire Commissioner

Natural Gas Market/Utilization

1 p.m. — Pipeline Project NewsPanelists:Robert Riga, Spectra EnergyAndrew Emhoff, National Fuel Gas SupplyKristine Gagliardi, Columbia Pipeline GroupAnthony Cox, UGI Energy Services, Inc.

2:30 p.m. — Gas-to-Liquids (GTL) in theAppalachian BasinDavid Marks, Dominion Field Services

3 p.m. — Praxair’s OTM Solid StateCombined Reformer: A Modular SyngasGeneratorShrikar Chakravarti, PhD, Praxair, Inc.

3:30 p.m. — Clean Rivers Opportunitieswith Clean Fuels: Highlights of the PRCCNatural Gas MARAD Towboat ProjectLutitia Clipper, PhD, Clipper Enterprises LLC

Environmental

1 p.m. — Proven Water ManagementSolutions Now and BeyondDevesh Mittal, Fluid Recovery Services

1:45 p.m. — The “Components” ofSuccessful Optical Gas Imaging Programsin PADomenic Tedesco, Trinity Consultants

2:30 p.m. — Detecting Dangerous GasesBefore Something Goes WrongRob Cose, Command Systems

3:15 p.m. — Design-Build-WarrantyContracting for Geohazard MitigationCorey Mislinski, PE, GeoStabilizationInternational

3:45 p.m. — Tank Containment Made EasyMatthew Huff, New Pig Energy

August 24 activities:• Golf • Sporting Clays

Page 6: The PIOGA Press - July 2016

Page 6 The PIOGA Press

New EPA “Zero Discharge” Wastewater Rule for the Oil and GasIndustry re POTWs per 40 CFR Part 435 applies to Pennsylvania

“conventional” formations/wellsOn Tuesday, June 28, the U.S. Environmental Protection Agency published its 6/28/16 EPA Final Rule (81 Fed. Reg. 41845) thatprohibits the discharge of onshore “unconventional oil and gas” (UOG) wastewaters to publically owned treatment works(POTWs), effective August 29, 2016, per changes to 40 CFR §435.33 and §435.34.

The problem is that a number of formations and wells our industry considers “conventional” are considered “unconventional” inthis Final Rule and therefore erroneously subject to EPA’s new “zero discharge” rule – and we must try to correct this.

Proposed Rule. The April 2015 proposed rule defined “unconventional oil and gas” as “crude oil and natural gas produced by awell drilled into a low porosity, low permeability formation (including, but not limited to, shale gas, shale oil, tight gas, tightoil).”

While PIOGA submitted comments on the proposed rule, PIOGA did not comment on the proposed UOG definition because ofthe EPA’s numerous statements indicating that the new rule was not proposed to apply to “conventional” oil and gas wastewaters:

● “During initial development of Marcellus shale gas resources, some operators managed UOG wastewater by transfer toPOTWs. EPA did not identify other areas in the U.S. where POTWs routinely accepted UOG extraction wastewaters.”

EPA supported these statements with a summary of how Pennsylvania, as well as Ohio and West Virginia—which bothuse the term “horizontal well” to generally refer to the same sector of the industry that PA defines as “unconventional”—responded to UOG extraction wastewater discharges into their POTWs.

● “EPA conducted seven site visits [six in Pennsylvania] between May, 2012 and September, 2013 to UOG extraction com-panies and UOG extraction wastewater treatment facilities.”

● “In addition to site visits, EPA conducted 11 telephone conferences or meetings with UOG operators and facilities thattreat and/or dispose of UOG extraction wastewater.”

● “EPA also contacted 11 vendors of equipment and processes used to manage and treat UOG extraction wastewater.”

● “EPA Region 3 provided information about the development of the Marcellus shale gas industry and disposal of shale gaswastewater, including discharges to POTWs.”

● “The scope of this proposed rulemaking is limited to pretreatment standards for wastewater generated from unconvention-al, rather than conventional, oil and gas extraction facilities.”

● “As discussed above, EPA has not been able to identify any existing UOG discharges at present to POTWs.”

● “EPA proposes that further subcategorization [of the oil and gas extraction category] is not appropriate because EPA hasnot identified any onshore UOG operations that currently discharge to POTWs.”

● “While the existing oil and gas regulation applies to both conventional and UOG extraction (except coalbed methane), theproposed rule would add pretreatment standards only for facilities engaged in oil and gas extraction from UOG sourcesthat send their discharges to POTWs. EPA proposes to reserve standards for conventional oil and gas extraction for possi-ble future rulemaking, if appropriate.”

And finally, this statement in the “Summary” of the proposed rule, repeated basically verbatim in the Final Rule: “Based onthe information collected by EPA, the requirements in this proposal reflect current industry practices for unconventional oiland gas extraction facilities, therefore, EPA does not project the proposed rule will impose any costs or lead to pollutantremovals, but will ensure that such current industry best practice is maintained over time.” Emphasis added.

Final Rule & TDD. The “Technical Development Document” (TDD) referenced in the Final Rule and published concurrentlywith the Final Rule elaborates on the definition of UOG in the Final Rule and makes clear that the new Final Rule applies towhat in Pennsylvania is considered and defined as “conventional” oil and gas wastewaters.

The Final Rule defines UOG as “crude oil and natural gas produced by a well drilled into a shale and/or tight formation (includ-ing, but not limited to, shale gas, shale oil, tight gas, and tight oil),” with no further clarification in the regulatory text or pream-

PIOGA Action Alert

Page 7: The PIOGA Press - July 2016

February 2014 Page 7July 2016 Page 7

ble as to how EPA is defining “shale and/or tight formation,” other than a preamble reference to the June 2016 TDD for addition-al information. Note the deviation from the proposed rule definition—less clarity by the removal of “low porosity, low per-meability” formation.

While the TDD cross-references several other definitions as being “generally consistent” with the new Final Rule definition,including Pennsylvania’s definitions of “unconventional formation,” “unconventional well,” and “conventional formation,” thediscussion at pages 18-19 and Tables F-3 & F-4, Appendix F, make clear that the new Final Rule definition is not consistent withPennsylvania’s definitions.

These referenced tables list the formations nationwide that EPA considers to be either “shale” or “tight,” based on a similar list-ing in an EIA document, Assumptions to the 2015 Annual Energy Outlook (Table 9.3). In the Appalachian basin, the listincludes the Devonian, Clinton-Medina and Tuscarora formations—which as we all know have been drilled for decades inPennsylvania as “conventional” formations—in addition to the Marcellus & Utica Shale formations.

Immediate Impact. A number of PIOGA members producing in the Pennsylvania “conventional” Devonian, Clinton-Medinaand & Tuscarora formations have reported sending their produced water to POTWs. The new Final Rule definition of UOG asexplained in the TDD prohibits this activity effective August 29, 2016.

The ultimate responsibility for compliance with this prohibition is on POTWs and operators producing “UOG wastewaters” asdefined by EPA.

Immediate Response. It is clear that the EPA’s statements that:

● no “unconventional” wastewaters as defined by EPA are currently going to POTWs;

● the new proposed and final rules simply reflect current industry practices; and

● the new proposed and final rules will not impose any costs are false. There are two manners of immediate response: politi-cal pressure and litigation

are false. There are two manners of immediate response: political pressure and litigation.

Litigation. Under Section 509(b)(1) of the Clean Water Act (CWA), judicial review of the Final Rule can be had only by filing apetition for review in the U.S. Court of Appeals within 120 days after the regulation is considered issued for purposes of judicialreview [July 12, 2016], so by Nov. 9, 2016. Section 509(b)(2) of the CWA prohibits the requirements of the Final Rule frombeing challenged later in civil or criminal proceedings brought by EPA to enforce the requirements.

Political pressure. To try to address this situation more quickly and with more certainty than through litigation, members mustask their Pennsylvania state and federal legislators to inform the Obama administration and the EPA as quickly as possible thatthe EPA’s inclusion of formations Pennsylvania considers and defines as “conventional” in the new Final Rule’s definition of“unconventional oil and gas” formations will eliminate one of the few available methods of disposal of conventional wastewaters,and cause the immediate shut-in of a significant number of conventional wells in Pennsylvania as well as significant financialharm to Pennsylvania POTWs that presently receive conventional wastewaters.

It should be emphasized that allowing Pennsylvania POTWs to continue to accept and treat conventional wastewaters is entirelyconsistent with the EPA’s statements in both the proposed and final rules that “EPA does not project” that the new rule “willimpose any costs or lead to pollutant removals, but will ensure that such current industry best practice is maintained over time.”

Pennsylvania state legislators should also be asked to request that DEP officials also inform the EPA of the devastating effect ofthe new Final Rule on the Pennsylvania conventional oil and gas industry.

Legislators and the EPA should be informed that the EPA’s statements in support of the new proposed and final rule are false anddo not support the inclusion of formations Pennsylvania considers and defines as “conventional” in the new Final Rule’s defini-tion of “unconventional oil and gas” formations.

Members can identify their state and federal legislators at www.bipac.net/lookup.asp?g=PIOGA.

A copy of the alert with links to documents mentioned above can be found athttp://members.pioga.org/resource/resmgr/Docs/PIOGA_Alert_EPA_Final_Rule_r.pdf.

Page 8: The PIOGA Press - July 2016

Page 8 The PIOGA Press

Oral arguments were made June 8 before the fullCommonwealth Court in Harrisburg in PIOGA’s chal-lenge to the Department of Environmental Protection’s

continued use of provisions of Act 13 that were declared invalidor unenforceable by the Pennsylvania Supreme Court in theDecember 2013 Robinson Township v. Commonwealth decision.

In Robinson Township, the Supreme Court invalidated andenjoined nearly all provision of Act 13’s Section 3215, includingthose authorizing DEP’s process for considering impacts of oiland gas wells on certain public resources. As a result of PIOGA’slitigation, however, the department has changed its historic andsingular reliance on section 3215(c) (and its predecessor section601.205(c) in the 1984 Oil and Gas Act) as the basis for impos-ing those requirements in the well permit application decisionalprocess (July 2015 PIOGA Press, page 1) and now argues thatthe department has authority other than section 3215(c) toimpose these requirements—if section 3215(c) was enjoined inthe first place, which the department also now says it wasn’t.The department included these requirements in the new Chapter78a regulations governing unconventional natural gas operationsand stated in its Regulatory Analysis Form (RAF) for the pro-posed regulations (submitted well before PIOGA filed this law-suit) that the authority for these requirements was section3215(c). Predictably, the RAF for the final-form regulations

states the department’s new litigation position.PIOGA is asking the Commonwealth Court to rule that DEP

does not have any authority to require operators, as part of thewell permit process, to coordinate with the entities that managepublic resources and to prepare plans to protect thoseresources—to the department’s unbridled and standardless satis-faction. However, as PIOGA pointed out, the department’s lackof authority does not mean that the Commonwealth’s publicresources will be unprotected, because well permit applicantsand operators are required to comply with federal andPennsylvania statutes and regulations, such as the federalEndangered Species Act and Safe Drinking Water Act, and thePennsylvania Safe Drinking Water Act and Pennsylvania Fishand Boat Code, that authorize federal and state agencies (i.e.,“resource” or “jurisdictional” agencies) to protect publicresources within their jurisdiction.

In briefs leading up to the court session, PIOGA emphasizedthat the Supreme Court “did not hypothecate” that the publicresource provision of Act 13 “might be subject to injunctionunder limited circumstances.” “The Supreme Court outright stat-ed that [ section 3215(c)] is enjoined.”

DEP, by contrast, contends that qualifying language in theSupreme Court decision means the public resource sections wereunconnected to a setback-waiver section the court found uncon-stitutional, allowing the public resource provisions to standalone.

Arguing on behalf of PIOGA, Jean Mosites of Babst Callandtold the Commonwealth Court that the Supreme Court was clearthat the parts are inseparable and must all be rejected. “They areinextricably intertwined. They fall together,” she told the court.

The court has already given credence to the basis of PIOGA’slegal position. In denying DEP’s attempt to have the case thrownout on procedural grounds in December, the CommonwealthCourt asserted that the Supreme Court “has already found thatprovision [section 3215(c)] to be unconstitutional and enjoinedits application” (January PIOGA Press, page 1).

DEP countered in briefs leading up to the oral arguments thatit also has authority under other laws and the state constitutionthat allow it to continue considering public resource impacts inits well permit application decisional process even if the courtfinds that the Supreme Court invalidated and enjoined section3215(c).

PIOGA, however, took issue and said in briefs that such aposition has “no logical stopping point.”

“DEP’s interpretation of the law would impermissibly giveDEP discretion to define ‘public resources’ to include any ani-mal, mineral, vegetable, or person, place, or thing of its choosingfor the purpose of bringing anything of its choosing—including(but not limited to) any and all wells or well sites—into the orbitof what it sees as an unbridled ‘public resource’ protectionpower.”

Summing up the choice facing the court, Judge P. KevinBrobson said, “We have to try as best as we possibly can to fig-ure out what the Supreme Court meant.” There is no indicationyet when the court will issue a decision, although the court’sgoal is to do so within three months of oral argument. ■

Commonwealth Court hears arguments in PIOGA’s Act 13 case

Page 9: The PIOGA Press - July 2016

February 2014 Page 9July 2016 Page 9

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Page 10: The PIOGA Press - July 2016

Page 10 The PIOGA Press

For more information, visit vorys.com/shale.

Vorys, Sater, Seymour and Pease LLP 500 Grant Street, Suite 4900, Pittsburgh, PA 15219

Columbus Washington Cleveland Cincinnati Akron Houston Pittsburgh

B U S I N E S S .

W E A R E U N A P O L O G E T I C A L LY, U N D E N I A B LY P R O U D T O B E I N T H E

At Vorys, we are not just attorneys who “do” oil and gas. We are truly steeped in the business.

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

the industry since the 1960s. We do unitizations for more producers than anyone else in the state

of Ohio. And we are knowledgeable about every step of the process, from production to midstream

to the courthouse. Are we oil and gas folks? Heck, yes. As a matter of fact, we are.

ANDOIL GAS

Page 11: The PIOGA Press - July 2016

February 2014 Page 11July 2016 Page 11

On June 15, the North Central Pennsylvania RegionalPlanning and Development Commission along withCORE PA Global hosted seven international journalists

who were curious about the consumer market for compressednatural gas (CNG) vehicles. The “O” Ring CNG station andtraining center in Brookville provided the backdrop for a two-hour presentation and roundtable.

Questions ranged from the cost of conversion kits to theresponse from American citizens. The chief editor of Drillingand Exploration World (DEW) Journal from India stated that inIndia all commercial vehicles must run on CNG. Why the UnitedStates would not necessarily mandate fueling quotas and furtherconversation around U.S. entrepreneurial spirit helped the for-eign journalists realize the infrastructure, the politics and thecapital needed to launch a successful CNG project.

PIOGA’s Joyce Turkaly said a few words about the associa-

tion’s mission to support the development of downstream mar-kets by preparing a contrast of the amount of gas we have pro-duced here in the state as well as our demand sectors, somewhich include export. Scott Swartzfager of National FuelDistribution spoke on supply that feeds the Brookville station;Geoff Bristow from the Department of Environmental Protectionspoke to the impact fee and the grant money available to buildout infrastructure and fleets; and Bob Beatty, owner of “O” RingCNG Fuel Systems, provided a presentation that illustrated howa good idea can be turned into reality, one in which we reducedependency on foreign oil, enhance our national security, createjobs locally and reduce harmful emissions into the environment.

CORE PA Global is an initiative established to increase thevisibility of a 53-county footprint of Pennsylvania to internation-al and domestic investors and reshoring prospects. ■

Summer mixer coming up July 28Find out more about PIOGA’s gas market development efforts

Join the Pipeline and Gas MarketDevelopment Committee onThursday, July 28, for an after-

work social mixer to learn moreabout what PIOGA is doing toexpand and develop markets for nat-ural gas. It’s also a great opportunityfor new members to find out moreabout the association.

The event takes place from 5:30to 7:30 p.m. at Rumfish Grille inBridgeville. The cost is $40 forappetizers and an open bar. To learnmore and register, visit the PIOGAEvents section at www.pioga.org.

Shown here is a scene from the2015 mixer at Rumfish Grille. ■

Talking CNG internationally

Page 12: The PIOGA Press - July 2016

Page 12 The PIOGA Press

ANF mineral rights legislationpasses congressional committee

Legislation authored by Pennsylvania Congressman Glenn“GT” Thompson that will protect the rights of privatemineral owners in the Allegheny National Forest (ANF)

was approved June 15 on a bipartisan vote of theHouse Natural Resources Committee.

The Cooperative Management of Mineral RightsAct of 2015, H.R. 3881, seeks to reinforce federallaw and consistent rulings of federal courts whichdetermined that the U.S. Forest Service is prohibit-ed from creating new rules and regulations relatedto the leasing and permitting of privately held min-eral rights in the ANF.

PIOGA and its predecessor organization, thePennsylvania Oil & Gas Association (POGAM),spearheaded the court cases that led to the rulingsupholding the rights of private mineral owners inthe ANF.

“Despite nearly a century of cooperationbetween the owners of private mineral rights andthe federal government, extreme environmentalgroups repeatedly attempted to shut down energy

House committee approvesminimum royalty legislation

Under legislation approved by a House committee on June27, producers of unconventional natural gas would beprohibited from paying royalty owners less than the 12.5

percent specified under the Guaranteed Minimum Royalty Act(GMRA). House Bill 1391, sponsored by Representative GarthEverett (R-Lycoming), comes in response to complaints by somelandowners that apportionment of post-production costs hasreduced their royalty payments far below the one-eighth mini-mum under the 1979 law.

The kernel of HB 1391 is this section: “The minimum royaltypayment to a lessor for unconventional gas well production shallnot be less than one-eighth of the lessor’s percentage ownershipin the production from the production unit calculated on the totalprice received by the operator for the production in an arm’s-

length transaction. No deductions of any costs shall result in aroyalty payment less than the one-eighth as provided in this sec-tion. The requirement for a minimum royalty payment shallapply to all existing and future leases for unconventional gaswell production and shall commence upon the effective date ofthis section.”

The bill allows leaseholders to bring a civil action for repay-ment in county courts of common pleas. Courts may impose tre-ble damages where it is found that producers act willfully in fail-ing to pay the guaranteed minimum royalty or where the lesseepreviously has be found to have failed to pay the minimum roy-alty.

In the 2010 decision in Kilmer v. Elexco Land Services, thePennsylvania Supreme Court ruled that because almost everyjurisdiction measured royalties at the wellhead at the time the1979 law was written, the court agreed that the GeneralAssembly must have intended the one-eighth royalty to be meas-ured there. Because of the difficulty in assessing the value of rawgas at the wellhead, producers developed a net-back method tocalculate royalties that subtracted from the downstream salesprice the expense associated with moving the gas from the well-head to the market. In Kilmer, the Supreme Court held that alease that incorporates such a net-back calculation meets therequirements of the GMRA.

HB 1391 passed the House Energy and Natural Resourcescommittee by a 20-6 vote. Critics of the proposal have warnedthat it is unconstitutional because it interferes with existing con-tracts. Lawmakers acknowledged the bill may need furtheramendments to address concerns, but the committee made nochanges before approving the measure.

According to Everett, the full House is not expected to takeup the bill before at least September. ■

Page 13: The PIOGA Press - July 2016

July 2016 Page 13

production in the Allegheny National Forest. The CooperativeManagement of Mineral Rights Act will make these affirmativecourt rulings law, protecting jobs in our communities while reaf-firming the importance of private property rights,” saidThompson, a member of the House Natural ResourcesCommittee.

The Allegheny National Forest covers more than 500,000acres in northwestern Pennsylvania and is located in Elk, Forest,McKean and Warren counties. More than 70 percent of theANF’s subsurface is privately owned. ■

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By Matt Mandel, Energy In Depth

Ajudge in the U.S. District Court of Wyoming ruled lastmonth that the Bureau of Land Management (BLM) hasno authority to regulate hydraulic fracturing on federal

and tribal lands. According to Judge Skavdahl’s ruling, “The constitutional

role of this court is to interpret the applicable statutory enact-ments and determine whether congress has delegated to theDepartment of Interior legal authority to regulate hydraulic frac-turing. It has not.”

Under the fracking rule, regulations on several aspects of oiland natural gas development would have increased—and thusincreased cost of development—even though regulations in theseareas already exist at both the state and federal level. As the rul-ing notes: “The Fracking Rule’s focus is on three aspects of oiland gas development—wellbore construction, chemical disclo-sures, and water management—each of which is subject tocomprehensive regulations under existing federal and/orstate law” (emphasis added).

States have effectively regulated fracking within their bordersfor years, crafting laws and rules to meet the unique resourcesand situations in each state. Barry Russell, president and CEO ofthe Independent Petroleum Association of America (IPAA), sum-marized this point best in his statement about the ruling:“Independent producers are good stewards of our lands. We rec-ognize that every energy-producing area has different needs andrequirements, which is why the states are far more effective atproperly regulating hydraulic fracturing than the federal govern-ment.”

This ruling will undoubtedly come as a blow to anti-frackingactivists in the “Keep it in the Ground” movement, who havebeen staging increasingly extreme demonstrations in their effortsto ban fracking on federal lands. But as IPAA also noted, thisdecision “demonstrates BLM’s efforts are not needed and thatstates are—and have for over 60 years been—in the best positionto safely regulate hydraulic fracturing.” ■

Federal judge strikes down fracking rule on public lands

Page 14: The PIOGA Press - July 2016

Page 14 The PIOGA Press

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Impact tax payments top $1B

Over the past five years, the Pennsylvania Public UtilityCommission has collected and distributed more than $1billion in Act 13 unconventional well impact fee pay-

ments to communities across Pennsylvania. The latest distribu-tion—which was due to be paid out by July 1 for the 2015 calen-dar year—was $188.7 million, a decline of approximately $35million. The PUC says the lower distribution is due to a reduc-tion in the price of natural gas, which drove down the fee paidper well by $5,000, as well as the increasing age of wells, whichlowers the well fee.

Just under $102 million goes to county and municipal govern-ments where the unconventional wells were drilled. About $68million is earmarked for environmental programs, roadwayrepairs, water and sewer infrastructure upgrades, and other proj-ects. The remaining $18 million goes to state agencies specifiedunder Act 13.

Among counties, the biggest recipients are WashingtonCounty at $5.7 million, down more than $800,000 from the yearbefore, Susquehanna County at $5.3 million and BradfordCounty at $4.9 million. Among municipalities, Morris Townshipin Greene County is receiving the most at $848,000, followed byAuburn Township in Susquehanna County ($805,000) and CoganHouse Township in Lycoming County ($799,000).

For more about the fee and its distribution, visit the PUC’sAct 13 page, www.act13-reporting.puc.pa.gov. ■

New PUC commissioner approved

With his nomination unanimously approved by thestate Senate on June 15, David Sweet will giveDemocrats a 3-2 majority on the Pennsylvania

Public Utility Commission.Sweet pledged in his confirmation

hearing remarks to be “a responsible andrespectful watchdog for consumers,”emphasizing the importance of educatingconsumers on their utility service andoptions in the competitive marketplace.

Prior to his appointment to the PUC,Sweet was a senior advisor to Governor Wolf, focusing onenergy and economic development issues. Sweet also servedin the Pennsylvania House of Representatives from 1977 to1988 and was campaign manager in Ed Rendell’s successful2002 gubernatorial campaign.

For most of his career, Sweet was a partner at PepperHamilton LLP and Buchanan Ingersoll & Rooney PC, focus-ing on administrative and regulatory matters, legislative advo-cacy, and public finance. He earned his bachelor’s degreefrom the University of Pennsylvania and a master’s degreefrom the University of Chicago before graduating from thePenn State Dickinson School of Law.

Sweet succeeded Pamela A. Witmer on the PUC. Her termexpired on March 31.

Page 15: The PIOGA Press - July 2016

February 2014 Page 15July 2016 Page 15

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

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Page 16: The PIOGA Press - July 2016

Page 16 The PIOGA Press

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Top OSHA fines increasingby nearly 80 percent

Maximum penalties for OSHA violations are set toincrease for the first time since 1990 as part of overall

federal penalty adjustments mandated by Congress last year.The increases were announced June 30 by the Department

of Labor, which issued two interim rules covering penaltyadjustments for several of its agencies, including theOccupational Safety and Health Administration, the MineSafety and Health Administration, and Wage and HourDivision.

OSHA’s new penalty levels take effect after August 1,when the maximum penalty for serious violations will risefrom $7,000 to $12,471. The maximum penalty for willful orrepeated violations will increase from $70,000 to $124,709.

Any citations issued by OSHA after August 1 will be sub-ject to the new penalties if the related violations occurredafter November 2, 2015.

For more information, go to www.osha.gov/penalties.html.

review of a final agency action, such as an approved jurisdiction-al determination, for which there is no other adequate remedy.The Obama administration argued that the companies’ threeoptions amounted to adequate remedies, and so they could noteven challenge the Corps’ jurisdictional determination in court.The justices rejected that argument, writing that the companies“need not assume such risks while waiting for [the administra-tion] to ‘drop the hammer’ in order to have their day in court.Nor is it an adequate alternative to APA judicial review for alandowner to apply for a permit and then seek judicial review inthe event of an unfavorable decision.”

“The [Clean Water] Act…continues to raise troubling ques-tions regarding the government’s power to cast doubt on the fulluse and enjoyment of private property throughout the nation,”Justice Anthony Kennedy wrote in his concurring opinion in theHawkes decision, which can be found at www.supremecourt.gov/opinions/15pdf/15-290_6k37.pdf.

The court’s decision in this case could fracture the legal foun-dation of the Obama administration’s rule expanding the defini-tion of “waters of the United States” for purposes of the CleanWater Act. The WOTUS rule, which the administration finalizedlast summer, extends federal jurisdiction to irrigation ditches,isolated ponds, prairie potholes and other non-navigable waters.

Nearly 90 plaintiffs have filed lawsuits regarding the legalityof the rule, including 31 state governments. The U.S. Court ofAppeals for the Sixth Circuit has imposed a nationwide stay onthe rule pending further judicial proceedings, which are expectedto conclude at the Supreme Court. If the Hawkes case is an indi-cation, the justices could reject the Obama administration’s rulesthat make it hard for Americans to prove that their property con-tains no “waters of the United States.” ■

Safety Committee CornerSafety Committee CornerSupreme Court allowsreview of Clean Water Actjurisdiction determinations

In a unanimous decision released last month, the SupremeCourt ruled that landowners can challenge attempts by theU.S. Army Corps of Engineers to subject private property to

the Clean Water Act. The decision in U.S. Army Corps ofEngineers v. Hawkes Co. could spell trouble for the Obamaadministration’s rule expanding the definition of “waters of theU.S.” (WOTUS).

In Hawkes, the Corps issued an “approved jurisdictionaldetermination” that the property of three companies inMinnesota contained wetlands that could be considered waters ofthe United States. The Corps decided that there was a “signifi-cant nexus” to the Red River 120 miles away. Under the agency’srules, this determination meant that the land was subject to feder-al regulation under the Clean Water Act. The Supreme Courtexplained that this left the property owners with three options:

(1) Go through an arduous and expensive process to get a per-mit to use the land, including filing suit if they were denied. Thecourt noted that the permit application process on average takes788 days and costs $271,596 to complete.

(2) Face substantial civil and criminal penalties by goingahead without a permit. Civil penalties alone could add up to$37,500 per day.

(3) Completely abandon plans to use the property. The Administrative Procedure Act (APA) authorizes judicial

Page 17: The PIOGA Press - July 2016

February 2014 Page 17July 2016 Page 17

Taking our message on the roadBy Dan WeaverDirector of Public Outreach

On June 9 and 10 PIOGA members participated in politi-cal caravans throughout Western Pennsylvania withCitizens to Protect PA Jobs coalition members. The pur-

pose of the event was to continue delivering the anti-severance-tax message to targeted legislators in their districts, with C4coalition partners and industry employees standing steadfasttogether.

Over the two days the four groups managed to meet with:• Senator Scott Hutchinson• Senator Don White• Senator Randy Vulakovich• Senator Pat Stefano • Senator Camera Bartolotta• Representative Jason Ortitay• Representative Jim Christiana • Representative Rick Saccone • Representative Dave Reed• Representative Nick Kotik• Representative Curt Sonney• Representative Mark Longietti• Representative Ted Nesbit• District director for Senator Elder Vogel, Josh Konecheck,

and his chief of staff, Cheryl Schriner • Michael Cmar, district director for Senator Guy

ReschenthalerPIOGA’s staff and Legislative Committee continue monitor

any movement on the severance tax front. Please remember thateven though it seems to be off the table for now we cannot letour guard down. We need to stay persistent with the message thatthe industry doesn’t need and will not survive any new taxes.

Our industry is under constant attack these days from manysides. We are amidst trying times as we face anemic gas pricesfor the foreseeable future. As layoffs continue on what nowseems like a daily basis, our adversaries see this as a perfectopportunity to further their agenda for a fossil-fuel-free world.We must stop referring to ourselves as companies and corpora-tions and bring in the human element and emotion.

Remind the public and politicians that it’s not just the loss ofa “job,” but a loss of a colleague and someone’s family income.According to the Pennsylvania Department of Labor andIndustry, the average salary in the third quarter of 2015 was$95,576 for someone working directly in our industry. It is near-ly impossible during these economic times to find a job outsidethe industry that comes close to that wage. So not only did afamily lose an income, but a community lost a consumer and thestate lost a taxable income.

On August 24, 1814, the British invaded Washington, D. C.,and people fled the city so quickly that they left pots cooking onthe stove. The British proceeded to burn and destroy everythingin sight connected with the government, including the WhiteHouse. Nineteen days later, the British approached Baltimore,expecting the same success as they had in the capital. To theirsurprise they found a city that was entrenched, a harbor that wasblockaded and people willing to fight. We all know in the endwho won the war. We as an industry need to decide who we wantto be, Washington or Baltimore, as our war clearly isn’t over. ■

Chevron employees Beth Smock and Nicholas Staffieri flankSenator Pat Stefano during last month’s political caravanthrough Western Pennsylvania.

Page 18: The PIOGA Press - July 2016

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CommentaryA much-needed victoryfor rural PennsylvaniaBy Representative Martin Causer

After more than four years of fightingefforts by bureaucrats at theDepartment of Environmental

Protection to circumvent the legislature andregulate our conventional oil and gas pro-ducers out of business, rural Pennsylvaniaearned a much-needed victory last month.

Governor Tom Wolf signed into law abill to stop implementation of new regulations for shallow wellproducers that would have made it financially difficult, if notimpossible, to continue their operations and further damaged ourregion’s struggling economy.

The regulations represented a gross overreach by the DEP, asthe legislature never authorized the agency to rewrite convention-al regulations in the first place. A 2014 law aimed to clarify thatregulations for conventional and unconventional drilling were tobe entirely separate, but DEP ignored that too. It also violatedelements of the state’s Regulatory Review Act relating to smallbusinesses and ignored its own advisory boards.

In short, the entire process was a travesty.And, without this law, the travesty would have turned to

tragedy for the thousands of hardworking men and womenwhose livelihoods depend upon the conventional oil and gasindustry.

To their credit, producers from across the Northern Tierimmediately took an active role in advocating for their industry.They worked hard to educate anyone who would listen about thedifferences between the conventional and unconventional drillingindustries and why the regulations being proposed by DEP wereunreasonable and unnecessary. Those of us elected to representareas where this type of drilling takes place did the same.

We explained that conventional operations are generallysmall, family-owned businesses that have been producing oil andgas safely in our region for generations. That the owners of thesebusinesses and the people who work for them raise their familieshere. That they have a vested interest in abiding by the regula-tions already in place to ensure the health and safety or our com-munities and the environment.

And finally, a bipartisan majority of lawmakers came to seethat the conventional oil and gas industry is a cornerstone of theeconomy in many areas of rural Pennsylvania. That it providesgood, family-sustaining jobs to thousands of people. That it playsa vital role in meeting our Commonwealth’s energy needs. Andthat it produces a vital component for hundreds of products peo-ple use every day, including everything from gasoline for ourcars and oil or natural gas to heat our homes to various plastics,asphalt, synthetic fabrics, medicines and more.

Further recognizing the importance of this industry, the newlaw, Act 52 of 2016, creates the Pennsylvania Grade Crude

Page 19: The PIOGA Press - July 2016

July 2016 Page 19

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 minimalformatting—bold and italic fonts are OK, as are bulleted ornumbered lists. Your submission is subject to editing forlength, 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 forany people or products in a photo. Send image files separate-ly, not embedded 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, emailMatt or call 814-778-2291.

PIOGA Member ProfileDevelopment Advisory Council. This council would help preventanything like this from happening again by having a council ofexperienced people in place to advise and assist DEP in ensuringany new regulations affecting the conventional oil and gas indus-try are reasonable and reflect the unique characteristics andprocesses of shallow well drilling.

This truly is a victory for our area and all of ruralPennsylvania. ■

Martin Causer represents the 67th Legislative District in thePennsylvania House of Representatives. The district includes allof McKean and Cameron counties and a large portion of PotterCounty. See the article on page 1 for more about the new Act 52.

Join us for theseupcoming PIOGA events:

• Pig Roast, Technical Conference& Sports Outing / August 23-24

• Divot Diggers Golf OutingSeptember 22

Page 20: The PIOGA Press - July 2016

Page 20 The PIOGA Press

$20

$25

$30

$35

$40

$45

$50

$55

$60

Natural Gas Futures Closing PricesAs of Junly 7

Month PriceAugust 2016 $2.758September 2.750October 2.789November 2.951December 3.210January 2017 3.347February 3.339March 3.291April 3.070May 3.034June 3.080July 3.129

SourcesAmerican Refining Group: www.amref.com/Crude-Prices-New.aspxErgon Oil Purchasing: www.ergon.com/prices.phpGas futures: quotes.ino.com/exchanges/?r=NYMEX_NGBaker Hughes rig count: phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-

reportsotherNYMEX strip chart: Emkey Energy LLC, emkeyenergy.com

Oil & Gas Trends

10

15

20

25

30

35

40

45

Jul Aug Sep Oct Nov Dec Jan Jan Feb Mar Apr May Jun

Pennsylvania Rig Count

Penn Grade Crude Oil Prices

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February 2014 Page 21July 2016 Page 21

724.830.3061 westmorelandcountyidc.org

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Page 22: The PIOGA Press - July 2016

Page 22 The PIOGA Press

Cameron Energy Co 1 6/27/16 123-47959 Warren Sheffield TwpDR&D CO 1 6/6/16 123-47859 Warren Glade TwpJKLM Energy LLC 2 6/18/16* 105-21860 Potter Ulysses Twp

6/18/16* 105-21861 Potter Ulysses TwpKCS Energy Inc 3 6/13/16 123-47682 Warren Watson Twp

6/20/16 123-47681 Warren Watson Twp6/27/16 123-47680 Warren Watson Twp

PennEnergy Resources LLC 6 6/27/16* 007-20463 Beaver New Sewickley T6/27/16* 007-20485 Beaver New Sewickley T6/27/16* 007-20481 Beaver New Sewickley T6/29/16* 007-20467 Beaver New Sewickley T6/29/16* 007-20468 Beaver New Sewickley T6/29/16* 007-20469 Beaver New Sewickley T

Range Resources Appalachia 5 6/8/16* 125-28001 Washington N Strabane Twp6/8/16* 125-28002 Washington N Strabane Twp6/8/16* 125-28003 Washington N Strabane Twp6/9/16* 125-27996 Washington N Strabane Twp6/9/16* 125-27999 Washington N Strabane Twp

RE Gas Dev LLC 4 6/3/16* 019-22498 Butler Oakland Twp6/3/16* 019-22543 Butler Oakland Twp6/3/16* 019-22544 Butler Oakland Twp6/3/16* 019-22545 Butler Oakland Twp

Rick & Sons Oil LLC 2 6/2/16 123-47876 Warren Mead Twp6/8/16 123-47873 Warren Mead Twp

Seneca Resources Corp 6 6/29/16* 047-24965 Elk Jones Twp6/29/16* 047-24942 Elk Jones Twp6/29/16* 047-24966 Elk Jones Twp6/29/16* 047-24967 Elk Jones Twp6/29/16* 047-24968 Elk Jones Twp6/29/16* 047-24969 Elk Jones Twp

Vantage Energy Appalachia II 4 6/27/16* 059-27057 Greene Franklin Twp6/27/16* 059-27059 Greene Franklin Twp6/27/16* 059-27060 Greene Franklin Twp6/27/16* 059-27058 Greene Franklin Twp

Spud Report:June

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.dep.pa.gov/DataandTools/Reports/Pages/Oil-and-Gas.aspx.

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.

June May AprilTotal wells 34 37 18Unconventional 27 32 14Conventional 7 5 4Gas 27 32 14Oil 7 5 3Combination oil/gas 0 0 1

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Page 23: The PIOGA Press - July 2016

PIOGA Board of DirectorsGary Slagel (Chairman), Steptoe & Johnson PLLCSam 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.Thomas M. Bartos, ABARTA EnergyStanley J. Berdell, BLX, Inc.Carl Carlson, Range Resources - Appalachia, LLCMike Cochran, Energy Corporation of AmericaMike Colpoys, National Fuel MidstreamDon A. Connor, Open Flow EnergyTed Cranmer, TBC ConsultingJack Crook, Atlas Resource Partners, LPMichael Donovan, Seneca Resources CorporationRobert Esch, American Refining Group, Inc.Michael Hillebrand, Huntley & Huntley, Inc.Jim Hoover, Phoenix Energy Productions, Inc. Gregory Muse, PennEnergy Resources, LLCBill Polacek, Environmental Tank & Container Stephen Rupert, Texas Keystone, Inc.Jake Stilley, Patriot Exploration CorporationWilliam Stoner, Universal Well Services, Inc.Todd Tetrick, EnerVest Operating, LLCMatt Tripoli, IMG MidstreamBurt 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 CompanyKevin Gormly, Vorys, Sater, Seymour and Pease LLP (ViceChairman)

Pipeline & Gas Market Development CommitteeBob Eckle, Appalachian Producer Services, LLC

Health & Safety CommitteeWayne Vanderhoof, RJR Safety, Inc.

Meetings CommitteeLou D’Amico, PIOGA

Tax CommitteeDonald B. Nestor, Arnett Carbis Toothman, LLP

Communications CommitteeTerry Jacobs, Penneco Oil Company, Inc.

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

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

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

DevelopmentDan Weaver ([email protected]), Public Outreach DirectorDanielle Boston ([email protected]), Director of AdministrationTracy Zink ([email protected]), Administrative Assistant

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

Northern Tier Office (Matt Benson)167 Wolf Farm Road, Kane, PA 16735

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

February 2014 Page 23July 2016 Page 23

PIOGA EventsInfo: www.pioga.org/events

Pig Roast, Technical Conference and Sports OutingAugust 23-24, Seven Springs Mountain Resort Champion

Divot Diggers Golf OutingSeptember 22, Tam O’Shanter Golf Club, Hermitage

Industry EventsIOGANY Summer Meeting

July 13-14, Peek’n Peak Resort, Clymer, NYInfo: www.iogany.org/events.php

KOGA 80th Annual MeetingJuly 19-21, Northern Kentucky Convention Center, Covington

Info: koga.memberclicks.net/upcoming-events

IOGAWV Summer Meeting

August 7-9, The Greenbrier, White Sulphur Springs, WV

Info: iogawv.com

OOGA Summer Meeting

August 15-16, Zanesville Country Club, Zanesville, OH

Info: oogasummermeeting.com

IOGAWV Sports Weekend

September 9-10, Lakeview Golf Resort, Morgantown, WV

Info: iogawv.com

Eastern Section, American Association of Petroleum

Geologists

September 25-27, Lexington (KY) Convention Center

Info: www.esaapgmtg.org

IOGANY Annual Meeting

October 19-20, Holiday Valley Resort, Ellicottville, NY

Info: www.iogany.org/events.php

IPAA Annual Meeting

November 9-11, The Cloister, Sea Island, GA

Info: www.ipaa.org/meetings-events

Calendar of Events

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Dan Palmer - Crude Relationship Manager PA / NY

[email protected]

Purchasers of Light Sweet Paraffinic Crude Oil

www.amref.com814-368-1200

mSpecialty Refining Solutions ®

Founded 1881 in Bradford, Pennsylvania. We are committed to supporting the local community,

creating sound jobs and a sustainable future.

Customer Focused - Service Driven

Page 24: The PIOGA Press - July 2016

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

Address Service Requested

[email protected]

ResponsibleReclamationAn opportunity to restore diversity

• Conservation seed mixes

• Native seeds

• Bioengineering materials


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