Ohio Seeing $12B Go To Gas Infrastructure

PITTSBURGH – Natural gas processors MarkWest Energy, Dominion Resources, M3 Midstream and others are building about $12 billion worth of infrastructure in Ohio, according to an official with the state Department of Natural Resources.

While Rick Simmers, chief of the Division of Oil and Gas Resources Management at ODNR, spoke Friday during the DUG East conference in Pittsburgh, he noted a case before the Ohio Supreme Court is challenging his agency’s exclusive authority to regulate drilling and fracking throughout the Buckeye State.

Simmers reminded those in attendance at the two-day conference that although advances in horizontal drilling and fracking now allow for exploration in the Utica and Marcellus shale formations, there have been about 280,000 wells drilled in Ohio since 1861.

“We believe regulation is best at the state level,” Simmers said, noting the city of Munroe Falls in Summit County remains determined to gain some authority over fracking.

In 2004, the Ohio General Assembly gave the state DNR “sole and exclusive authority to regulate the permitting, location and spacing of oil and gas wells.” However, Ohio Supreme Court Chief Justice Maureen O’Connor recently agreed to accept Munroe Falls’ appeal, so the matter is pending.

Simmers said Ohio Gov. John Kasich takes fracking regulation seriously. He said seismic activity near an underground injection well in the Youngstown area a couple of years ago led to more stringent rules regarding where drillers can place such wells.

“Gov. Kasich said this must be done properly,” Simmers said. “He asked if we had enough staff. At that time, we didn’t.”

Simmers also said the population density of the area of Ohio in which fracking is happening is relatively high, especially compared to that of states such as North Dakota or Texas. This causes more problems because people may complain about the activity, he said, such as if someone reported natural gas flaring as a fire to public authorities.

“This creates a real regulatory problem,” he said.

Also Friday, Paul Weissgarber, senior vice president of Crosstex Energy, said that “condensate” that companies such as Chesapeake Energy, Gulfport Energy or others may report during production is “a very light oil.”

“The bulk of this is gathered at the well pad. Some of it drops off into the pipeline, while some drops off in compressor stations,” Weissgarber said.

“There is this myth out there that everyone who works in this industry is coming from Texas. At least for us, this is not the case,” he added.