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Shale Industry Argues 'What's Truth, What's Myth'
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YOUNGSTOWN, Ohio -- The executive director of API Ohio, a division of the American Petroleum Institute, says that initiatives to ban oil and gas exploration in certain areas of Ohio may not hold much clout now, but could affect public policy in the future.
"If over time, you see a number of local communities who are questioning whether they want activity in their area -- that could impact state law," says the trade group’s Christian Zeigler. "Policies can change, and they can change based on the public's perception of an issue."
As it stands, the Ohio Department of Natural Resources -- not municipalities or any other political subdivision -- has authority over where energy companies can drill. Since 2010, major oil companies have moved in to eastern Ohio, staking our positions to drill in the Utica shale, a rock formation that holds vast reserves of natural gas and natural gas liquids.
Zeigler, who has served as API Ohio's executive director for about a year, made the rounds Monday across northeastern Ohio and visited a handful of media outlets, including The Business Journal.
Recently, activists concerned about the potential of shale exploration and the use of hydraulic fracturing within the city limits of Youngstown announced had collected enough signatures to again place a Community Bill of Rights measure on the May ballot. The measure would ban hydraulic fracturing, the operation of wastewater injection wells, and shale drilling within the city.
Although the state of Ohio has control over this issue, Zeigler and others in his industry are concerned that these efforts send the wrong message, and says that it's incumbent upon organizations such as his to educate people about "what's truth, what's myth."
Most of the concerns expressed by activists behind the community initiatives are not well-founded, Zeigler reports. "They're based on things that aren't true, and I think that we've seen a response from these communities that these groups have gone into that say we want the development here."
Nevertheless, Zeigler acknowledges that the industry can be dangerous, as evidenced by a Chevron gas well that exploded two weeks ago in Greene County, southwestern Pennsylvania, killing a worker.
"It's something that we're mindful of," Zeigler relates. The American Petroleum Institute, he says, is an organization committed to standards in the industry, taking the best practices in the field and carrying them through to federal and state legislation. "Safety is one of our major concerns."
Much of the backlash against the industry is focused on hydraulic fracturing, a practice that injects sand, water and a smattering of chemicals into wells to free up trapped gas in shale formations. Those opposed to the practice argue that over time, these chemicals could seep into aquifers or other reservoirs and contaminate fresh drinking water.
Susie Bieresdorfer, one of the activists behind the Youngstown citizens' rights initiative, points to what occurred at the Chevron well as the consequences of poor management and the lack of regulations governing the industry.
"That was a tragedy. There are not enough inspectors, not enough regulations," Bieresdorfer says. "A drilling permit is a permission to pollute. We don’t have laws and policies in place."
Beiersdorfer and others attended a demonstration yesterday outside Medina High School, where Gov. John Kasich was to deliver his State of the State address. She says there are questions about the state's relationship with the oil and gas industry.
"We're calling for an investigation related to Kasich, ODNR, and the oil and gas industry," she says. "People are fed up. People need to wake up that there's nobody protecting them."
But Zeigler points out that oil and gas exploration, including hydraulic fracturing, is nothing new to Ohio.
"Commercial drilling in Ohio has been happening since 1860, and we've had hydraulic fracturing in the state since the 1940s," Zeigler notes. "This isn't new to Ohio. There's not a case of the hydraulic fracturing process contaminating water."
Instead, the oil and gas industry has helped stimulate job creation and Ohio's economy, Zeigler reports.
More than 180,000 shale-related jobs have been added since exploration in the Utica began in earnest in 2010, Zeigler reports, citing the Ohio Department of Job and Family Services' shale report. "That's everything from oil and gas extraction and also includes ancillary jobs that are supporting the industry."
On average, wages in the industry stand at $70,000-plus a year, Zeigler says, compared to $40,000 in other industries in Ohio. "You're going to see more jobs in the midstream area, pipeline construction."
Still, the industry as a whole hasn't done a good job of promoting the job opportunities, says Rebecca Heimlich, campaign manager for the trade group.
It's critical that guidance counselors and educators understand there are good-paying jobs in this industry, Heimlich emphasizes. "We do want to make sure that people in Ohio – parents, kids, educators – know about these opportunities," she says. "We have an aging workforce, and over the next several years, we're going to need to replace that workforce."
Since 2010, the state has issued 1,093 horizontal drilling permits in the Utica. Of that number, 737 are drilled and 367 are in production.
Much of the activity is concentrated in the southern portion of the play, where many companies have turned up wells with strong yields of natural gas liquids. Meanwhile, pipeline and other infrastructure work is moving forward. "As more infrastructure improvements happen, you're going to see more production coming out of the Utica."
The American Petroleum Institutes's membership consists of 550 national companies that encompass the entire industry, including the major oil and gas producers, Zeigler reports. Such leverage comes in handy when there is a particular issue that needs sounded out in Columbus or Capitol Hill.
The organization has provided information and comments that have helped shape legislation, and is now evaluating how proposed regulations will affect the industry, Zeigler adds.
"Once we have a conversation with policy makers about who our members are and the investments they're making – billions of dollars that they're investing in the state – it goes a long way to getting an opportunity to explain our side of an issue," he says.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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