OH Supreme Crt Considers Whether Landmen Need Real Estate License
In March MDN reported on a court case decided in Ohio’s Seventh District Court of Appeals that seems to say that at least some landmen in Ohio DO need to be licensed real estate agents, in order to get paid (see OH Court Rules Landmen Need to be Licensed Real Estate Brokers). Although the court decision was deep in the weeds with legalese, our takeaway was that if a landman is compensated via a commission for the deals he or she brokers, that person needs to have a real estate license. If the landman is paid “day rate”–that is, paid by the day by a drilling company to get deals signed no matter how many deals and no matter the value of the deals–that landman does not need a real estate license. At least that’s our understanding. However, the issue isn’t settled yet. The case decided in March, Dundics v. Eric Petroleum Corp., was appealed to the Ohio Supreme Court by those not happy with the outcome that some landmen will need a real estate license. The Supremes have just agreed to hear the case…
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This story necessarily gets into the weeds of pipeline construction. But so you have the essential story line up front, this is it: On Monday Energy Transfer asked the Federal Energy Regulatory Commission (FERC) for permission to dump something called annular pressure monitoring (APM) when drilling underground (horizontal directional drilling, or HDD) for the Rover Pipeline–and on Tuesday FERC granted that permission. Here’s the slightly longer explanation. Rover is a $3.7 billion, 711-mile natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada. Early on, Rover had early missteps when using HDD to insert pipeline under things like rivers and roads. The most serious episode occurred when Rover drilling spilled 2 million gallons of non-toxic drilling mud in a swamp near the Tuscarawas River (in Ohio) back in April (see 
NEXUS Pipeline has had to use the unpreferred last option and has taken landowners of 42 properties to court using eminent domain in order to secure easements so they can lay pipeline through those properties. NEXUS is a $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. NEXUS received final approval for the project from the Federal Energy Regulatory Commission (FERC) in August, the first major pipeline to get approved following a newly restored quorum at FERC (see 
The U.S. District Court in Akron, OH has just made a major ruling that affects all Utica landowners and drillers. In 2015, the Ohio Supreme Court accepted a case that will sound familiar to readers of MDN. The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) are allowed to deduct certain post-production costs from landowner royalty checks. The Ohio Supremes were asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. The Supremes came down off Mount Olympus in November 2016 to render their verdict (see 
Last week NEXUS Pipeline notified the Federal Energy Regulatory Commission (FERC) they had begun construction on the $2 billion, 255-mile interstate pipeline that will run from Ohio through Michigan and eventually to the Dawn Hub in Ontario, Canada. We purposely held off on sharing this exciting news until we could tell you where construction has begun. Each week NEXUS, like other interstate pipelines answering to FERC, provides a weekly update on construction and other project activities. We have a copy of that report (below). What does it show? Preliminary activities are taking place to move equipment, put up signage, and begin to work in “Spread 1”–meaning somewhere within Columbia, Stark, Summit, and Wayne counties in Ohio. Similar work is happening in “Spread 4”–meaning counties in Michigan. Initial site preparation is already happening at three of the four planned compressor stations. Here’s what we have been able to piece together about the initial construction work done on NEXUS…
Ohio Utica Shale drilling is showing signs of a new boom in drilling–much to the delight of everyone, except anti’s. A new shale boom in the Buckeye State is good for landowners, it’s good for the economy, and it’s good for jobs. Frankly, it’s good for everyone. What are the signs of a burgeoning new shale boom? Here’s one sign: Business at a barge facility on the Ohio River where drillers offload equipment and supplies had all but dried up–at least traffic coming from shale-related customers. The facility operator kept afloat by handling soybeans and corn. But now? The bookings from the oil and gas industry are rolling in again. Drilling supplies like barite are once again coming to the facility. Add to that rig counts in Ohio are inching up–almost at parity with Pennsylvania (see 
Last week the The Independent Power Producers (IPPs) of Ohio, Pennsylvania, and West Virginia wrote an official letter to the Federal Energy Regulatory Commission (FERC) detailing their objection to a proposed plan by the Dept. of Energy (DOE) to give special treatment to electric power generating facilities powered by coal and nuclear plants. The DOE recently ordered FERC to devise new market rules favoring coal and nukes on the premise they contribute to “grid resiliency.” The IPPs writing the letter in opposition represent at least 26 shale gas-fired electric plant projects across the three states, which will contribute $21 billion to those state economies and generate 20,000+ jobs. Below we have the letter sent to FERC by the IPPs. That letter prompted our friends at Energy in Depth to produce a list of the projects the IPPs are building (or have built) in the tri-state area. It is an impressive list. We liked it and grabbed it to share with the MDN audience…
Last week the Ohio Environmental Protection Agency (OEPA) held a “first-of-its-kind” oil and gas open house to discuss communication between the agency and the oil and gas industry. Which is kind of interesting considering Craig Bulter, the head of OEPA, is no glittering example of communication. He’s been talking with Rover Pipeline people, saying one thing in private, and another in public (see 
Canadian company Enbridge owns the mighty Texas Eastern Transmission Company (Tetco) pipeline system in the U.S. Last Wednesday, as workers were installing test equipment along the line in Noble County, OH, the workers noticed soil around the pipeline moving around. Not a good situation. So they shut off the flow of gas through that section of the pipeline, south of the Berne compressor station in Noble County. That portion of the pipeline went from flowing 1.6 to 2.3 billion cubic feet of gas per day (depending on the news source), down to flowing zero. The situation was investigated and the pipeline returned to service on Sunday, Oct 15th. In the meantime, from the 11th to the 15th, Tetco declared the situation “force majeure”–meaning “due to circumstances beyond our control we have to shut it off.” We assume force majeure was declared because shippers who wanted to move gas through the pipeline, and buyers on the other end, were screwed for a few days. Shippers lost money from gas they could have sold and buyers had to scramble to try and find other sources to meet demand. Economic losses for both. We’re guessing declaring force majeure lets Tetco off the hook legally for any potential monetary damages its customers experienced during the outage…
Yesterday Utica Summit V was held in North Canton, OH. MDN could not, unfortunately, attend. But others did and the reports we’re reading indicate it was another great event. Two major news items of interest came from the event. The first was the results of a recent economic study that show an amazing $54.7 billion has been invested in the Utica Shale play from 2012-2016, across upstream ($42.7 billion), midstream ($8.6 billion) and downstream ($3.4 billion). In a surprise statement, the report’s author said, “the biggest impact of the Utica may be the development of gas-fired power plants in Ohio and surrounding states.” The second news item was a big emphasis at the event on the downstream–on the really big deal the petrochemical industry is and will be for Ohio and surrounding states. Presenters made the point that some manufacturers in Ohio were cut off from plastics supplies from the Gulf Coast after the recent hurricanes to hit that area–and that with the Shell and potentially PTT Global cracker plants coming along, manufacturers in the region change where they source their supply of raw plastics. In fact, the petchem industry will explode in Appalachia. All thanks to the Utica (and Marcellus) and the ethane produced. Here’s a pair of reports from yesterday’s event…
It’s been a few months since we’ve brought you news about the monthly average for Baker Hughes’ venerable rig count–largely because after GE completed it’s merger with Baker Hughes they quit issuing monthly press releases from their website! We spotted a story in the Pittsburgh Business Times that talks about Ohio coming close to parity in their rig count with Pennsylvania–which is a really big deal–and the reasons for it. That story sent us looking for the latest rig count numbers and indeed, it’s true. As of September, PA averaged 33 shale rigs in operation, while OH averaged 29–the closest we’ve ever seen it. If you look at the counts for last week (BH does a weekly rig count too), the numbers are even closer: PA with 31 rigs, OH with 29. We don’t typically monitor the weekly counts as they always fluctuate up and down–better to look at monthly averages. But the fact remains that PA has been pretty steady, operating between 32 and 34 rigs per month since January of this year, while OH has gone from operating an average of 20 rigs in January to 29 last month, and West Virginia has gone from operating an average of 8 rigs in January to 15 rigs last month (nearly doubling). Yet PA is static. Is there an explanation? Some experts think there is, and it can be explained in a single word: pipelines…
