YOUNGSTOWN, Ohio -- The Ohio Department of Natural Resources has issued a permit to Kleese Development Associates Inc., Warren, to develop a new Class II injection well in Warren Township, according to records.

This would be the third injection well the company has in Trumbull County, ODNR records show. Kleese Development operates two other injection wells in Vienna Township. Company officials could not be reached for comment.

Development of new injection wells was thwarted in Mahoning County after a D&L Energy well was linked to a series of earthquakes in 2011, but the business remains active in Trumbull County.

American Water Management Services Inc., a division of Avalon Holdings Corp., operates an injection well site in Weathersfield Township. Last year, the state oil and gas commission ordered the operation shut down because of a small earthquake recorded near the deeper of two wells at the site. That well remains closed, but a shallower well was allowed to resume operations in September.

"We're just taking a truckload or two a day," said Ron Klingle, chairman of Avalon Holdings, Tuesday. "That's nothing, and the customers are out there."

The company has appealed the decision to stop activity at the deeper well but is yet to get a response from ODNR, he said.

"There is induced seismic activity in every part of the oil and gas industry," Klingle noted. He points out that the tremors recorded near American Water's injection well were insignificant and not felt by the public, yet the tremors registered on the very sensitive seismic monitors placed near the site.

To keep an injection well closed because of a small tremor that couldn't be felt by the public doesn't make sense, Klingle said, noting that the state has regulations related to other components of the industry, but not seismic activity.

"Right now, their standard is zero," Klingle says. "We have to make sure the state is being realistic."

Absent this clarity, companies are likely to pull their investments in the oil and gas industry knowing that they could be put out of business "for no reason at all," Klingle stated. "Why would we invest more money? That is the big concern everyone should have."

Another locally owned company, American Energy Inc., based in Cortland, holds permits for two injection wells in Trumbull County, one in Greene Township, the other in Brookfield.

"We've been keeping pretty steady," said Robert Barnett, owner of American Energy. "We recently drilled a well in Brookfield."

A second injection well in Greene Township is operational, and that site includes a seismic monitoring station and a recorder that keeps track of injection pressure levels. "We monitor our pressures very carefully," he said.

The company owns 80 gas wells across northeastern Ohio that target the Clinton sandstone formation. Two years ago it entered the injection-well business as exploration in the Utica and Marcellus shale plays took off.

Injection wells such as American Energy's are used across Ohio to dispose of wastewater generated from hydraulic fracturing, a process that injects sand, chemicals and millions of gallons of water under pressure into a recently drilled well to crack shale rock so the oil and gas deep underground is released.

"We've got a real good clientele that we work with," Barnett said, noting that the well has turned away water. "We don't want to take more than we can handle."

However, it's unlikely his company would drill any new injection wells in the near-term, Barnett says, because of a pull-back in drilling activity since oil prices began to plummet two months ago.

"Things are starting to slow a little," Barnett says. 

Meanwhile, permit activity for horizontal wells in the Utica shale of eastern Ohio continues in the southern portion of the play, ODNR records show.

Last week, ODNR issued nine permits, all of which are concentrated in the central or southern portion of the play.

Chesapeake Energy secured five more permits, four for wells in Carroll County and one in Harrison County. Two permits were awarded to Rice Drilling or wells in Belmont County; two more were issued to Gulfport Energy in Monroe County.

To date, ODNR has issued 1,743 horizontal well permits in the Utica, of which 1,290 are drilled and 713 wells are in production.

There were no new permits for horizontal wells last week in Mahoning, Trumbull or Columbiana counties during the week.

Nor were there new Utica permits issued for horizontal wells in nearby Lawrence and Mercer counties in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.

Copyright 2015 The Business Journal, Youngstown, Ohio.
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