Yesterday, the Ohio Power Siting Board (OPSB) authorized Oregon Clean Energy, LLC to construct the 799-megawatt Oregon Clean Energy Center, which will "utilize advanced gas turbine and combined-cycle technology to generate electricity," a press release from the board announced. Construction of the $860 million project will begin next month and it is expected to come online in May 2016. The application, which was filed in January 2013, was approved on an expedited basis. Bricker & Eckler partner Sally Bloomfield served as counsel on the project. For more, read the full press release.

Experts at a gas industry forum hosted by the West Virginia University College of Law last week said that "outdated policies and anti-competitive regulations" are hindering the potential growth of combined heat and power (CHP) systems, Coshocton Tribune reports. CHP, or cogeneration, systems produce electricity by capturing and reusing the heat that is usually wasted by traditional coal-fired power plants. About 80 percent of these systems in the United States are powered by natural gas, but the process only accounts for nine percent of U.S. power generation, the article said. Because prisons, colleges and other institutions "that produce electricity using coal- or oil-fired boilers and heat using separate systems" will soon have to comply with new clean air regulations, Ohio and the U.S. Department of Energy are "conducting a pilot project with CHP," the article said. For more, read the full story.

Ohio-based American Electric Power announced last week that in an effort to “make its remaining coal plants compliant with current and proposed federal regulations,” the company will spend between $4 billion and $5 billion over the next seven years to move its generating fleet “away from coal toward cleaner burning natural gas,” Reuters reports. AEP, described here as “the nation’s biggest coal generator,” said that it is now economical to retire “over 5,400 MW of coal generation by 2016” and to possibly convert as much as “1,800 MW of coal units to gas” since gas prices reached the $3.25 per mmBtu breakpoint. The company estimates that its generating capacity from coal-fired plants will drop from its current 65 percent to about 50 percent by 2020, the article said. For more, read the full story.

Proponents of Ohio’s shale boom were quick to distance themselves from D&L Energy and Hardrock Excavating, whose owner – Ben Lupo – is accused of dumping tens of thousands of gallons of oilfield waste into a storm drain in Youngstown, and were equally quick to make public their support for the Ohio Department of Natural Resources’ decision to revoke the operating permits for both companies, Columbus Business First reports (See our Feb 12, 2013, blog – "D&L Energy Group owner admits to illegally dumping potentially 240,000 gallons of drilling wastewater since September; may appeal ODNR’s revocation of his companies’ permits").  Industry advocates fear that opponents of hydraulic fracturing will use this singular incident to justify completely stopping oil and gas development in Ohio. While some think it is unlikely that “one dumping incident would change the political landscape on fracking in the state,” calls are being made for more stringent regulatory requirements, as well as “a pause in Ohio accepting out-of-state fracking waste until there is more information on the chemical make-up of the drilling fluids,” the article said. For more, read the full story.

A lobbying event sponsored by the Ohio Petroleum Council, the Ohio Shale Coalition, and the Ohio Oil & Gas Association took place at the Statehouse on Wednesday morning and drew more than 75 lawmakers and 200 industry representatives, The Associated Press reports. Lobbyists, employers and workers connected to Ohio’s burgeoning oil and gas industry gathered to “tout the industry’s economic benefits” for the state, less than two weeks before Gov. John Kasich introduces his two-year state budget, which may include a statewide income-tax cut funded by a tax hike on large-scale oil and gas drillers, the article said. For more, read the full story.

An editorial published on The Columbus Dispatch website today assumed the position that converting America’s vehicles to natural gas would not only enable American consumers to purchase an abundant, cheap and local energy source that would lessen our dependence on foreign oil, but would also have “enormous ramifications” for Ohio, which sits atop trillions of cubic feet of natural gas. In order for average consumers to make the switch, the editorial argues that companies and government agencies should take the initiative to convert their fleets and create a market for compressed natural gas refueling stations, which are – at present – few and far between. For more, read the full editorial.

In response to claims made during the Northern Ohio Energy Management Conference last week that renewable energy mandates should be repealed in light of cheap natural gas and a struggling economy, an editorial published on the Akron Beacon Journal website yesterday argues that the promise of shale should not “divert attention” from the state’s commitment to improve energy efficiency and promote alternative energy sources (See the Sep 26, 2012, blog – “Shale proponents speak out against renewable energy mandates during energy efficiency conference”). In favor of extending the federal production tax credit, the editorial argues that the fact that other energy sectors have received similar tax credits and subsidies invalidates the claim that such support amounts to “the government picking winners and losers” instead of the free market. For more, read the full editorial.

A theme emerged during the Northern Ohio Energy Management Conference in Akron yesterday wherein shale proponents repeatedly questioned Ohio’s need for state and federal renewable energy mandates now that the shale industry has taken off, The Plain Dealer reports. Several speakers remarked that such mandates distort competition and would not pass if put to a vote today because of the shale gas boom and the lackluster economy. Proponents of renewable energy maintained that energy efficiency is the “cheapest energy option” and that energy efficiency mandates create jobs, the article said. For more, read the full story here.

The Ohio Board of Regents announced today that it has launched a website to help connect “Ohioans seeking education and jobs in the energy industry” with education and training resources, as well as employment opportunities, that are tailored to their needs and interests, according to a press release from the board. Keeping with Governor Kasich’s vision that higher education institutions better equip students with the skills and knowledge needed by Ohio’s businesses and employers, the website – OhioEnergyPathways.org – features information about the advanced energy, renewable energy, energy efficiency, and oil and gas sectors. For more, read the full press release here.

Recently, Ohio Attorney General Mike DeWine issued an opinion regarding a question from Richland County officials about whether “the county could enter into an agreement with a private oil and gas drilling company or wind farm operator to repair roads damaged by their heavy equipment,” Gongwer reports. Officials cited concerns over the “application of public bidding laws, prevailing wage laws, and a host of other legal issues that normally surround the construction of public improvements,” the article said. DeWine opined that the circumstance was “pursuant to a contract with a county and for a county, and is a public improvement.” Since a private company – and not the county – will employ the workers, DeWine said it will be the responsibility of the employer to pay in accordance with Ohio’s prevailing-wage laws. However, Ohio’s competitive bid laws for public construction projects will not be triggered since the agreement “does not require the county to spend more than the $25,000 threshold that triggers the requirement,” the article said. For more, read the opinion here.

The Advanced Energy Business-to-Business Conference & Expo has grown out of its northeast Ohio roots and will cover the entire state during its annual event, which takes place this year at the Greater Columbus Convention Center from October 30-31, 2012, a press release from NorTech said. NorTech produced the event and Advanced Energy Economy Ohio is presenting the agenda, which includes sessions with industry experts on key advanced energy sectors like waste and biomass to energy, energy efficiency, energy storage, fuel cells, smart grid, shale gas and solar, as well as a technology showcase featuring “entrepreneurs, companies, and researchers seeking collaborators, partners and funding,” the release said. More than 700 industry professionals are expected to attend and more than 120 companies and organizations are expected to exhibit, the release said. For more, read the press release here or for registration and other information, visit the expo website here.

Gov. Kasich recently signed a memorandum of understanding designed to "encourage manufacturers to start making more vehicles that burn compressed natural gas," Gongwer reports. As Ohio becomes the eleventh state to sign on, the hope is that multi-state cooperation produces "enough demand to drive down the cost of CNG vehicles to stimulate a market," the article said.

As noted previously, Ohio Gov. John Kasich revealed details this week of the mid-biennium budget review, which will include legislation that would revise the state's energy policy. News reports--available here, here and here--have focused primarily on the Governor's proposals to update the regulations and taxes on oil and gas companies operating in Ohio.

E&E News is featuring a report on how the shale natural gas boom in Ohio is presenting challenges for the effort to develop a wind farm in Lake Erie. The article begins:

Two years ago, before shale gas burst on the Ohio scene, the city's political and business leadership saw a future of wind power development within reach just off their Lake Erie shore.

The Lake Erie Energy Development Corp., a nonprofit created by Cleveland-area leaders, asked developers to submit bids for a $100 million pilot offshore wind park. They hoped it would be a foundation for a new industry that would spread from turbine, tower and electronics manufacturing to construction of barges that would install offshore towers. Starting with 20 to 25 megawatts of output, the project could grow to 1,000 MW -- the size of a nuclear power plant -- by 2020, sponsors said in 2010.

Now that vision has drifted over the horizon, out of sight for now, because of Ohio's excitement over low-priced power fueled by shale gas and fading political support for renewable power, according to the common assessment of energy and industry experts in the state.

The full article (subscription required) is available here.

Ohio Gov. John Kasich and administration officials on Wednesday briefed reporters on the Governor's mid-biennium budget review, which will include legislation that would revise the state's energy policy. A fact sheet on the major components of the energy policy is available here. The administration will provide additional details to the General Assembly starting tomorrow.  

As reported by The Cincinnati Enquirer, Gov. John Kasich outlined the pillars of his forthcoming energy policy for a handful of Cincinnati business leaders last week. The policy calls for the state to develop its shale oil resources, look at new opportunities for coal, and expand the use of alternative fuels. In the article, Wayne Struble, the governor’s policy director, says Kasich wants to expand the definition of renewable and advanced energy under Ohio law to include co-generation and waste energy at industrial facilities. 

Gov. John Kasich gave a preview of his plan to overhaul Ohio's energy policies on Tuesday at the Greater Cleveland Partnership, The Plain Dealer reports. The plan calls for governing several elements of the shale gas industry; developing new sources of power and transmission grids; and allowing "waste heat from industrial processes such as blast furnaces" to count as "meeting renewable energy or advanced energy mandates set down by existing state law," the article said. As reported earlier (Feb. 22, 2012, blog – Ohio Lawmaker wants blast furnace waste gas to be classified as renewable energy), opponents fear that such a move would flood the market with renewable energy credits, thereby slashing the value of the credits and making it more difficult to finance wind and solar projects. For more, read the full story here.

National Public Radio's Morning Edition program ran a story this week examining how relatively low natural gas prices in the United States are impacting the solar energy market. With increased production due to the kind of hydraulic fracturing and horizontal drilling now occurring in Southeast Ohio holding the line on the cost of electricity produced by natural gas, payback periods for some solar projects are on the rise, according to the story.

Chevron Corporation recently entered West Virginia by taking control of nearly 4,400 acres of leased land in Ohio County, reports a recent news article..  By entering the Ohio Valley, Chevron joins Hess and Exxon Mobil as another global oil company acquiring acreage in this region.  It appears that some of the leases have been signed with Ohio and Pennsylvania leasing agents on behalf of Chevron.

A new, grassroots trend resulting from the Marcellus and Utica shale boom in eastern Ohio involves the formation of landowner groups, a recent newspaper article explained.  The idea is simple: aggregate a large number of acres, make those acres available for oil and leasing, and receive "higher prices on lease bonuses, higher royalties on natural gas and oil production and better environmental protections."  For example, Bob Rea, a landowner in Columbiana County, started the Associated Landowners of the Ohio Valley in late 2010 with 18 families.  The group has now grown to more than 3,000 landowners in nine (9) counties, and a pool of 100,000 acres was leased to Chesapeake Energy in February 2011.  That initial group of ALOV landowners received a bonus payment of $2,250/acre and royalties of 17.5%.   Other landowner groups are popping up all over Ohio, including the recently formed Southeastern Ohio Landowners Association, Inc. in Washington, Guernsey, Monroe, Noble, and Morgan Counties.

A recent Herald Star article reports that the village council of Mingo, Ohio is exploring using future revenue from fracing to finance business development in the area including a water treatment plant. Located outside of Marysville, the economically challenged village is trying to recoup jobs and revenue lost when the local steel mill closed. Read more here.

Muskingum County could be home to a new ethane vaporization plant in the near future reports the Zanesville Times Recorder. The multi-million dollar plant would be a part of the Marcellus Ethane Pipeline System. Read more here.

According to a recent New York Times article, the U.S. Department of Energy’s Natural Gas Subcommittee issued a report addressing the environmental impacts associated with hydraulic fracturing, which is the process of injecting a highly pressurized mixture of water, sand and chemicals into shale formations to stimulate oil and gas production. The Department of Energy's report made recommendations to address public health issues such as water contamination, waste water handling and disposal, and alsorequested that further studies be conducted to verify that fracing is less harmful to the environment than other energy options. Read the full article here.

Ohio EPA has created a new general air permit that covers emission limits, operating restrictions, and monitoring, testing and reporting requirements for shale gas production. The agency states that the general permit will create consistent standards for the sites and will allow most applicants to apply for and receive permits in as little as two weeks. While the general permit will cover internal combustion engines, dehydration systems, truck-loading racks, storage tanks, flares and unpaved roadways, it will not cover activities that occur during the drilling and hydraulic fracturing phase. In the view of Ohio EPA, these activities are temporary and therefore exempt from permitting. The agency has not finalized the draft general permit and will be making it available for a 30-day public comment period later. Ohio EPA plans on announcing the beginning of the public comment period in the near future. The current version of the draft general permit, qualifying criteria and related information are available online here. The general permit is expected to be finalized and made available to applicants this fall.

The Stark County Development Board recently issued 10 recommendations relating to oversight on shale drilling in Ohio.   The recommendations, which are listed on the board’s website, http://www.starkcoohio.com/, include:
 
• Making certain that the Ohio Department of Natural Resources has enough money to hire inspectors and compliance officers, and that inspectors are at a well site during critical times in the drilling process.

• Emphasizing the inspection of wells during construction, and developing containment standards to minimize potential damage from on-site accidents.

• Having Ohio officials monitor drilling operations in other states to prepare for potential problems in Ohio.

• Creating minimum standards for energy companies and subcontractors that want to work in Ohio.

• Regulating the disposal of brine and hydraulic fracturing material and flow back fluids.

For more information, you can read an August 12, 2011 article in the Canton Repository entitled, "Stark Development Board takes close look at fracking."

The Columbus Dispatch, Warren Tribune Chronicle, Times Reporter, the Canton Repository, and Business Journal Daily higlighted the recent announcement by Chesapeake Energy that the Utica shale play  in Ohio is "major" and "liquids rich."  With landholdings of more than 1 million acres, Chesapeake estimated that its leaseholds could produce as much as $20 billion worth of oil and natural gas.  To take advantage of this opportunity, Chesapeake expects to increase the number of drilling rigs in the state from five to forty by 2014.  Governor Kasich hailed the announcement for its potential impact on economic development and job growth in Ohio. 

ConocoPhillips, one of the nation's largest integrated oil and gas companies, recently announced that its refining/marketing and exploration/production arms will be separated into two stand-alone business entities.  An article in the Tulsa World estimated that even after the split, the spun-off refining entity "will be the largest refiner even and will eclipse Valero."  This split arrives on the heels of a similar announcement by Marathon in January 2011.

While the Obama Administration and natural gas industry have been promoting shale development and domestic natural gas supply, the New York Times reports that U.S. Energy Information Administration (EIA) employees (within the U.S. Department of Energy) remain skeptical about the shale gas industry.  The June 26, 2011 article cites to internal EIA e-mails and documents that expressed doubts and concerns about the projections, economics and sustainability of shale gas development.  Opposition to the article came quickly, including from Forbes and Energy in Depth (a compilation of responses from various sources).

A recent article in the Forth Worth Star-Telegram details the increasing number of oil and gas drilling rigs located in the State of Texas.  For the first time since a Houston-based firm began tracking the number of drilling rigs in the United States in 1987, the number of rigs topped 1,000.  Interestingly, the article reports that 843 of those rigs are in Texas, which account for approximately 45% of the drilling activity in the entire United States.

A June 20, 2011 article in Crain's Cleveland Business reports that increased Marcellus and Utica shale development could be a boon for Ohio manufacturers.  The article highlights the impact of shale development on the natural gas supply chain, focusing on businesses in northeast Ohio, such as Fairmount Minerals, Chart Industries Inc. and Carlisle Brake and Friction.  As Walter Good, the VP of economic development for the Youngstown/Warren Regional Chamber of Commerce states in the article, "[w]e see this as a transformational opportunity, not only for direct job creation and investment, but to reposition Northeast Ohio as a producer of products for this industry." 

Today, the Columbus Dispatch reported that the State of Ohio is taking advantage of the approximately 170 Class II underground injection control wells overseen by the Ohio Department of Natural Resources.  Just last year, the State of Ohio significantly increased the fees out-of-state haulers must pay to dispose of brine water into these injection wells.  Despite the increase, the Ohio Department of Natural Resources has seen a "dramatic increase" in the amount of brine disposed of in these wells, much of it coming from Marcellus and Utica shale development in nearby states.  In fact, nearly half of the brine disposed of in these injection wells between January and March 2011 has arrived from other states (e.g. Pennsylvania).  For more information on the treatment and disposal of flowback water from shale operations, click here.