July 2015 • Issue 63

The

PIOGA pressThe monthly newsletter of the Pennsylvania Independent Oil & Gas Association

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PIOGA’s Eastern Oil & Gas Conference and Trade Showreturns October 27-28 to the Monroeville Convention Center,with several new features this year. To find out how toreserve your exhibit space, turn to page 18.

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PIOGA is asking the Pennsylvania Supreme Court to stopthe Department of Environmental Protection from requir-ing well permit applicants to comply with certain provi-

sions of Act 13 that the court found unconstitutional and unen-forceable in its December 2013 Robinson Township v.Commonwealth decision.

In this decision the Supreme Court invalidated and enjoined

PIOGA asks Supreme Court to force DEP’s compliance with Act 13 rulingnearly all provisions of Section 3215, including those related tothe department’s decisional process for consideration of impactsof wells on certain public resources. DEP has continued to applythose requirements in the well permit application process, despiteboth the judgment of the court and the court’s denial of thedepartment’s request that the court reconsider its invalidation ofthese specific provisions.

“The Supreme Court made clear in its Act 13 ruling that spe-cific well permitting requirements in Section 3215 of the actwere unconstitutional and denied the department’s request forreconsideration of that decision in February 2014,” said PIOGAGeneral Counsel Kevin Moody. “It is unfortunate that PIOGAhas had to take this action, but court decisions apply to govern-ment agencies in the same way they apply to others, and DEP

Governor vetoes legislature’sseverance-tax-free budget package

Veteran Harrisburg-watchers predicted a bruising budgetseason this year as the conservative GOP leadership pro-vided obvious signals early on that it wanted nothing to

do Governor Tom Wolf’s tax-and-spend agenda. It was no sur-prise when the Republican-controlled General Assembly deliv-ered a no-new-taxes spending plan to the governor in time tomeet the annual June 30 deadline, although it was somewhat sur-prising that Wolf vetoed the whole thing rather than exercisinghis line-item veto.

Those actions set the stage for what is anticipated to be pro-tracted negotiations over a budget that both sides can agree to.As this article was written just after the Independence Day holi-

day, legislative leaders and the adminis-tration were starting to talk, but therewas no consensus as to whether the dis-cussion might take a few weeks or lastinto autumn.

The good news is that the budgetsent to Wolf contained no natural gasseverance tax. Despite the governor andhis proxies taking every opportunity todescribe such a tax as “reasonable,” thatopposing a severance tax was anti-edu-cation (a large portion of Wolf’s pro-

Of pelts and politics . . . . . . . . . . . . . . . . . . . . 5PUC stands by stripper well definition . . . . . . 6Navigating the new membership system . . . . 8See you at the Pig Roast! . . . . . . . . . . . . . . . 11Power industry a growth area for gas . . . . . . 12When actual notice isn’t “actual notice” . . . . 15Time to reserve your exhibit space. . . . . . . . 18Trenching and excavation safety. . . . . . . . . . 20Minimum royalty legislation reintroduced . . . 21Senate approves mine water legislation . . . . 21Litigation challenges in the basin . . . . . . . . . 22Impact fee pays out $223.5 million . . . . . . . . 25

Out and about with the outreach team . . . . . 26Support needed for PennEast project. . . . . . 26Pipeline Infrastructure Taskforce members. . 27Roger Willis retires from the board . . . . . . . . 28Chapter 78 comment thanks. . . . . . . . . . . . . 29PIOGA Member News . . . . . . . . . . . . . . . . . 29Oil & Gas Trends. . . . . . . . . . . . . . . . . . . . . . 32June Spud Report. . . . . . . . . . . . . . . . . . . . . 34Calendar of Events . . . . . . . . . . . . . . . . . . . . 35New members. . . . . . . . . . . . . . . . . . . . . . . . 35PIOGA contacts . . . . . . . . . . . . . . . . . . . . . . 35

Page 2 The PIOGA Press

Budget veto: Continued from page 1

posed levy would go toward public education) and that Wolf wassent to Harrisburg on a public mandate to deliver a natural gastax, the legislative leadership held firm.

Following a meeting between House and Senate leaders andadministration officials several days before the budget waspassed, Senate President Pro Tem Joe Scarnati described Wolf’sposition on a severance tax as “unnegotiable.”

“Our counter-proposal was nothing. Yeah, nothing,” Scarnatitold a news service after the meeting. “We are not sending thegovernor a severance tax.”

PIOGA statementFollowing the governor’s veto, PIOGA President and Exec -

utive Director Lou D’Amico issued this statement:“It is unfortunate that the governor has made a severance tax

on natural gas production his primary line the sand in the debateover the budget. The Commonwealth doesn’t tax something tospur its growth. The severance tax would be no different. Whynot place an excise tax on Governor Wolf’s former cabinet mak-ing business to help fund education? If the governor opposed thatidea because of its negative effect on the sale of cabinets, wouldhe be against education and children? Of course not, but that’swhat he says about severance tax opponents. This shows howdisingenuous his argument is. The same applies to his ‘we’re theonly state without a tax on drillers’ argument. We do have one—but it’s called an ‘impact fee’ instead of a ‘severance tax.’

“PIOGA believes adequate funding for the education ofPennsylvania’s children is an extremely important issue, but it is

not connected in any way to a severance tax, any more than itwould be connected to a new excise tax on cabinets or any otherparticular business or industry. The only link is the one Wolf’scampaign dreamed up and repeated over the past 18 months.

“The jobs and general state taxes our industry and its supplychain businesses provide for education are the real links betweennatural gas production and education. Drillers pay the same taxesother businesses and industries pay—as well as the specialimpact tax—so drillers are already paying more than their fairshare. If the current general state tax structure that provides edu-cation funding uses DOES NOT require companies to pay theirfair share, then no business is paying ITS fair share. Anothernew, special tax on one industry is not ‘fair’ by any rationalmeasure. PIOGA and other industry participants also support andprovide assistance to teachers and educational institutions to helpprepare our children for careers in the energy field.

“If drilling continues consistent with the Department ofEnvironmental Protection’s statistics, Pennsylvania can expectsee the total number of unconventional wells drilled in 2015 dropby more than 45 percent from the average of 1,500 a year from2010-2014. A businessman would realize this is the worst time toput another tax on our industry, but a politician insistent on ful-filling a campaign promise that never made any sense would notrealize this.”

Conventional oil and gas regulationsIn the portion of the budget package referred to as the fiscal

code, lawmakers included language directing the Department ofEnvironmental Protection to scrap and start over with the portionof its current Chapter 78 rulemaking addressing conventional oiland gas operations.

If that sounds familiar, it is. In the fiscal code for last year’sbudget, the General Assembly told DEP to create separateChapter 78 regulations for conventional and unconventionaloperations. However, rather than starting the process over in therulemaking for oil and gas surface operations, the departmentperformed what many criticized as a “cute-and-paste” separationof the proposed rules.

Steve Miskin, a spokesman for the House Republican caucus,said the amendment is necessary because the DEP’s divided rulesdo not fully comply with the legislature’s directive for the twoportions of the industry to be regulated differently.

“This is basically telling DEP, ‘Stop. They are dramaticallydifferent types of wells and you need to have separate regs,’” hesaid.

Even though Wolf vetoed the fiscal code along with the rest ofthe budget sent to him by the General Assembly, legislative lead-ers vow that the bifurcation directive will remain in whateverbudget package is ultimately approved.

Responding to the fiscal code amendment, DEP SecretaryJohn Quigley told the news service StateImpact PA, “If enacted,this would delay modernizing the regulations for conventionaldrilling, but it will not stop an update to the regulations, whichhaven’t been changed since 1984. If this fiscal code is adopted, itchanges the timing but not the substance of the regulations.”

In PIOGA’s formal comments to DEP’s Chapter 78,Subchapter C advance notice of final rulemaking (June PIOGAPress, page 1), the association highlighted the GeneralAssembly’s 2014 directive to create separate sets of regulationsand pointed out that DEP did not follow the Commonwealth

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Of pelts and politics

Governor Tom Wolf does not let a conversation on the state budget pass without calling for a natural gas extraction tax. Hisadministration is so obsessed with it that some in Harrisburg have commented that the severance tax is the “pelt” that theWolf administration demands in budget negotiations, regardless of the consequences it may have on jobs in Pennsylvania

and state revenues. That raises the question: what is a “pelt”? One definition is “the skin of an animal with the hair still attached toit,” also defined as a scalp, as in the context of the trophy sought by combatants during wars with Native Americans.

It was clear how important this pelt is to the governor during his budget veto news conference on June 30, when he mentionedthe severance tax three times in the first six minutes of his address that evening.

We have heard the governor say several times during and after his campaign how he wants the natural gas industry to thriveand continue to provide the jobs this Commonwealth desperately needs. That’s why he wants to tax the industry over and abovethe taxes already paid to the Commonwealth by every other industry. Using this logic, the governor’s plan to increase the statecigarette tax by $1 should be viewed as his effort to encourage more Pennsylvanians to smoke!

The reality is far different from his rhetoric. The oil and gas companies won’t be the only ones to sacrifice pelts. The thousandsof Pennsylvanians employed by the industry who will lose their jobs will also lose pelts to the governor’s political whim, alongwith the pelts of the thousands of citizens employed by the independent businesses supporting the industry. The small businessessupplying and servicing the industry will also lose pelts to the governor and his allies.

What about Pennsylvania’s consumers—residential, commercial and industrial users of natural gas? Ultimately, raising the costof natural gas development in Pennsylvania will add consumers to the governor’s line of pelts. Even Pennsylvania’s local and stategovernments will lose pelts to the severance tax. The governor’s proposal will strip local and county governments of the upsidebenefit of the local impact tax (commonly referred to as a “fee”). Tax revenues to the Commonwealth from industry wages, royal-ties, fuel taxes and income taxes will decline. We also cannot overlook the pelts that will be sacrificed by needy Pennsylvaniansthat rely on energy assistance from LIHEAP. Does anyone think that higher energy costs won’t affect those subsidies?

It’s difficult to count the pelts that will be taken in lost opportunities in investment and manufacturing as the tax forces energycosts higher and availability lower, but make no mistake—their numbers will be significant. A recent CNBC report rankedPennsylvania 40th nationwide in attractiveness to business. Only 10 other states, including West Virginia—the state the governorwants to imitate—rank worse. Isn’t it time for state government to encourage rather than discourage business development andjobs? Isn’t it time we create the kind of jobs that can support a family instead of jobs that require one to ask if customers wouldlike fries with their meal?

Could that be the reason the Pennsylvania Chamber of Business and Industry is leading the fight against the severance tax? Nodoubt. The Chamber’s member companies and their employees will undoubtedly also lose pelts if the governor’s intransience onthis issue is successful.

The governor’s pursuit of his prized pelt started the day his first campaign advertisement hit the airwaves, and it only intensi-fied with the appointment of several key leaders in his administration. He has surrounded himself with advisors who have dedicat-ed considerable time—in their careers at PennFuture—working to advance the ultimate death of all fossil fuels.

Does anyone believe these appointments come from a desire to have the coal, oil and natural gas industries thrive? Imagine thehowling outrage of the public and the state’s newspapers if then-Governor Corbett had staffed his inner circle and his cabinet withindividuals from the natural gas industry. But we hear crickets waiting on any criticism of this governor’s appointments.

From a regulatory standpoint, Pennsylvania has one of the strictest, if not the strictest, oil and gas regulatory program in thenation. Even during the Corbett administration, the tendency of the Department of Environmental Protection was to over-regulatethis industry compared to any other in the Commonwealth. That is not enough for the ideologues in this administration. They willnot be satisfied until the industry is nothing but a memory in Pennsylvania. That is the ultimate victory pelt for Governor Wolf.

There is one industry that has made the most significant positive impact on Pennsylvania’s economy in the last decade.Governor Wolf and his supporters have an answer for that—tax and regulate that industry to death, and do it when the industry isstruggling with low prices and lack of infrastructure.

If the administration ultimately gets its pelt from the General Assembly, what will the others skinned by his actions be forcedto do? Will the men and women working to produce natural gas move their families to other states benefiting from increased oiland gas production? Will they be lucky enough to find lower paying jobs in Pennsylvania?

There will be a lot of hair attached to the severance tax “scalp” if the governor has his way. But every action has a reaction:whose pelts will all of the people negatively impacted by a severance tax be looking to hang on their lodge poles in future Maysand Novembers?

This article was published as an op-ed on the website of The Harrisburg Patriot-News, pennlive.com

By Lou D’Amico, PIOGA President & Executive Director

Page 6 The PIOGA Press

PUC stands by its interpretationof ‘stripper well’ in impact ‘fee’dispute

The Pennsylvania Public Utility Commission has ruledagainst PIOGA member Snyder Brothers, Inc. in a caseinvolving the definition of a stripper well under the impact

fee provisions of Act 13. (Note: Although PIOGA believes theimpact fee is really a tax, we will primarily use the statutoryterm in this article.)

In a 5-0 decision on June 11, the PUC dismissed most of thearguments made by Snyder Brothers and PIOGA and ordered thecompany to pay $499,520 in fees and interest on 24 vertical gaswells for 2011 and 21 wells for 2012. The PUC determined thata proposed $50,000 civil penalty was not warranted under thecircumstances, which included no willful or intentional miscon-duct by Snyder Brothers, no injury from the nonpayment andSnyder Brothers’ good faith cooperation with the PUC.

A “vertical gas well” is subject to the impact fee while a“stripper well” is not. A vertical gas well is defined as “anunconventional gas well which utilizes hydraulic fracture treat-ment through a single vertical well bore and produces natural gasin quantities greater than that of a stripper well.” The statutedefines a stripper well as: “An unconventional gas well incapableof producing more than 90,000 cubic feet of gas per day duringany [emphasis added] calendar month, including production fromall zones and multilateral well bores at a single well, withoutregard to whether the production is separately metered.” At issueis the meaning of the seemingly straightforward stripper welldefinition.

Snyder Brothers and PIOGA argue that the word “any” in thedefinition clearly means a stripper well is one that cannot pro-duce 90,000 cubic feet of gas per day in any one month duringthe reporting period. In other words, a well that produces lessthan 90,000 cubic feet of gas per day in any single month duringthe reporting period is a stripper well. Until this order, the PUChad interpreted the word “any” in the stripper well definition tomean “one”—so it would have appeared to anyone looking atthis issue objectively that the PUC agreed with PIOGA andSnyder Brothers on the meaning of this critical word in the defi-nition.

Indeed, in October 2013 the PUC issued a notice of proposedrulemaking for the impact fee “largely” representing a codifica-tion of the commission’s previous determinations set forth in itsimplementation, reconsideration and clarification orders regard-ing the impact fee. In that notice the PUC stated clearly that itsprevious—and consistent—determinations interpreted the word“any” to mean “one”:

All vertical gas wells on the Department ofEnvironmental Protection’s (DEP) spud list as ofDecember 31 of each year will be subject to the feefor that year unless the producer verifies to theCommission that a particular well did not producenatural gas in quantities greater than that of a stripperwell during any calendar month in the reportingyear. Id. This means that even if a vertical gas wellproduces natural gas in quantities greater than that ofa stripper well in only one month of a calendar year,

that vertical well will be subject to the fee for thatyear.

In the Snyder Brothers order, the PUC said PIOGA took thisstatement out of context and proceeded to analyze the stripperwell definition as if it had not made any previous determinationsand concluded—for the first time—that the word “any” wasambiguous and should be interpreted as its prosecutory staff con-tended.

Of course, the result of the prosecutory staff’s “interpretation”yielded the same result as the PUC’s—Snyder Brothers’ disputedwells are not stripper wells and are subject to the fee—whichPIOGA argued erroneously applied the correct meaning of theword “any” as “one” by focusing on the vertical gas well defini-tion—which doesn’t contain the word “any” —rather than thestripper well definition, which does contain the word “any.”Accordingly, in the PUC’s view, if a well produces in excess of90,000 cubic feet per day in in any one month during a calendaryear, it is subject to the impact fee.

A June 12 news report in the Pittsburgh Post-Gazette accu-rately described the issue:

Snyder Brothers argued that if a well’s productionfalls under 90,000 cubic feet per day (cf/d) of naturalgas in any one month during a calendar year, it isclassified as a “stripper well.” The PUC disagreed with that interpretation, arguingthat if a gas well’s flow rate exceeds 90,000 cf/d inany one month during a calendar year, then thatwell is subject to impact fees.

While PIOGA believes the PUC wrongly concluded thatSnyder Brothers owes the impact tax, a decision the associationintends to appeal, we also believe the PUC correctly decidedthere was no basis for assessing a substantial civil penalty onSnyder Brothers, in large part because of the company’s conductrelated to the dispute: Snyder Brothers’ filings fully disclosed thegas wells the company believed qualified as exempt stripperwells and the basis for that position, and followed the PUC’sadvice that producers not pay the impact tax on wells they hon-estly and reasonably believed were not subject to the tax becauseAct 13 does not provide for refunds—once paid, there is no rightto a refund. ■

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Navigating the new membership system and committee portal pages

In June we announced the launch of our new membershipsystem and “members only” website. We hope you’vehad the opportunity to log into the system and become

acclimated with the new resources that are now available toyou as a PIOGA member. If you didn’t receive theannouncement email that includes your unique usernameand password, please contact Danielle Boston atdanielle@pioga.org.

The members-only Homepage is your one-stop shop forweekly member news including key regulatory and legisla-tive alerts and information, weekly news clips fromPennsylvania newspapers and PIOGA member informationsuch as upcoming meetings and events.

Did you meet someone at a PIOGA event and want tofollow up? Find them fast in the new MembershipDirectory! The interactive directory is your quick resourcetool to finding other PIOGA members and colleagues. Youcan customize your search by many options for trying tofind members—for example by company name, last name,zip code or by member category.

Are you in need of a certain service or product for yourbusiness operations? Find a vendor quickly by using the onlineService Directory. You can research all PIOGA serviceproviders and professional firms and the products and servicesthey offer. Please support these PIOGA members as they are sup-portive of our trade association and help us with our collectiveeffort of seeing the oil and gas industry grow here inPennsylvania.

Are you looking for professional development or networkingopportunities? Go to the Events page to learn what upcomingPIOGA events are approaching or view the full calendar thattracks other industry-related events that you might want to knowabout.

Get involved and take action with our Advocacy/Resources

page! Learn about what’s happening in Harrisburg that mightimpact your business. Our Legislative Committee and our gov-ernment relations staff work hard to protect your rights and tokeep you abreast of new legislative bills that are being intro-duced. Keep checking this advocacy page as we will continuallyprovide updates on what’s happening and how you can getinvolved.

Need help in your community to educate students or otherlocal stakeholders about the oil and gas industry? The Educationpage will provide more information on PIOGA’s EnergyEducation Program (called PEEP) and how you can sponsor a“train-the teacher” program in your community. PIOGA willcontinue to expand our education page to include fact sheets andother helpful information that you can use to spread the wordabout oil and gas here in the Keystone State.

Are you a member of PIOGA’s committees? Now your com-mittee has a dedicated Committee Portal Page! The committeepages have the ability for “file sharing,” allowing members toaccess all committee documents and resource materials and alsoenabling document collaboration. Log in to the committee pagesto learn about upcoming committee meetings, committee mem-ber roster and contact information and to easily contact commit-tee chairs. Additionally, in your Preferences (under ManageProfile) if you select Groups—Email me when someone joins agroup of which I am a member—you will receive a notice when anew member joins the committee. Included will be a link to thatperson’s contact information.

The staff of PIOGA hope you find this new member systemeasy to navigate, full of relevant information and beneficial toyou as a member of our trade association. The website will con-tinually be updated and grow as we strive to meet our memberswants and needs. We want your feedback on the new system andwebsite! Please email any comments or suggestions toinfo@pioga.org or use the Contact Us link. ■

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Complete schedule and registration available under the PIOGA Events heading in theNews/Events section at www.pioga.org

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Page 12 The PIOGA Press

Power industry is a growtharea for natural gas By Joyce TurkalyDirector of Natural Gas Market Development

Merriam Webster defines reliability as the extent towhich an experiment, test or measuring procedureyields the same results on repeated trials. If you are

somewhat familiar with the work of the PIOGA Gas and ElectricCoordination Subcommittee, you may already know of the vari-ous stakeholders who have been testing the interdependence ofboth the natural gas and electric industries on four somewhatoverlapping fronts: pipelines, operations, rate structure and relia-bility in service.

When we formed this team two years ago, members openlyidentified their areas of expertise in pipelines and operations.Through our vigorous discussions on state and federal sensitivi-ties, educational field trips, and regional transmission organiza-tion (RTO) and independent system operator (ISO) workshops,we have gained much more knowledge that now aids the sub-committee to pinpoint actionable steps as we advance and refineour mission in this downstream sector. We will stay diligent tocommenting on any barriers to entry for natural gas fired genera-tion projects; we will set meetings with the Pennsylvania PublicUtility Commission to discuss our concerns with curtailment pri-ority behind the city gate; and we will work with our PR advoca-cy subcommittee to identify public opportunities of engagement.

In November 2013 Federal Energy Regulatory CommissionOrder 787 allowed for information sharing of non-public opera-

tional data between natural gas pipelines and RTOs. This noticeof proposed rulemaking regarding shared communication assist-ed the PIOGA Gas-Electric Subcommittee because both sides ofthe table needed to understand the direct impact of line pressureto ramp rates and talk through operational concerns to keep thegas pipeline systems in balance for all customers, not just gener-ators.

Much of the subcommittee’s earlier work involved under-standing what exactly it meant when a generator said it could notget gas. As a natural gas net exporting state, how could this bepossible in Pennsylvania? To the extent that a natural gas genera-tor was bidding into the market but could not fulfill its obligationwas enough reason alone fo r PIOGA members to take notice ofthe issue. On the natural gas side of the table, we could not fath-om why gas would be so hard to find. Turns out that there wasno shortage of supply, but electric and gas wholesale commoditytrading and scheduling characteristics were out of sync, pipelineoperational issues varied depending on where generation wassited, there was a lack of coordinated communications and infor-mation sharing details among gas and electric dispatch teams,and, finally, there were geographic gaps in pipeline infrastructureserving downstream markets.

Identifying the increasing use of natural gas as a generationfuel has been both exciting and challenging. To make a strongargument for why natural gas would essentially “keep the lightson,” we had to understand the electric wholesale market rules,and this was no easy task. We knew that natural gas was project-ed to increase as a base load fuel and could be a very reliableresource for the electric grid, but we also realized that in certaingeographic areas, such as New England, pipeline capacity was

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lacking and current RTO market rules did not allow generators afinancial recovery. Similarly, the RTOs and the states recognizedsome of the same gaps. Under the U.S. Environmental ProtectionAgency’s Clean Power Plan, states will have to submit compli-ance plans to the federal government by June 2016. When com-pared to other resources used in power generation, natural gasreduces emissions by 50 percent in CO2 by 67 percent in NOXby 99 percent in SO2 and completely eliminates mercury. Manystakeholders realize the greenhouse gas reduction percentages;however, the RTOs and the states are what we would call “fuelagnostic”—not advocating one resource over another. The feder-

al Energy Information Administration esti-mates that by 2038, gas-fired combinedcycle power plants will account for 50.5percent of U.S. power production, up from25 percent in 2014.

PJM Interconnection serves the electri-cal needs of 61 million customers andcoordinates the operation of our region’stransmission grid for 13 states and theDistrict of Columbia. In total the PJM geo-graphic footprint includes 62,556 miles oftransmission lines. PJM also administers acompetitive wholesale electricity marketand plans regional transmission expansionimprovements to maintain grid reliabilityand relieve congestion. The accompanyinggraphic illustrates that natural gas willgenerate 79 percent, or 18 gigawatts, ofthe power for Pennsylvania electric con-

sumers and 66 percent, or 62 GW, when considering the entire13-state footprint. PJM CEO Terry Boston admitted that the RTOwas not thinking of natural gas being a dominant fuel type 10years ago. ■

Given the recent Supreme Court Ruling on the EPA’s CleanPower Plan, we may have additional concerns and considera-tions for the Gas-Electric Subcommittee that were not apparentprior to preparation of this article; however, our overall objec-tives remain unchanged.

Page 14 The PIOGA Press

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When actual notice isn’t ‘actualnotice’ — the Harvilchuck case

Arecent Commonwealth Court decision may have signifi-cant implications for permittees in Pennsylvania obtain-ing approvals from the Department of Environmental

Protection under various environmental statutes and regulations.In Harvilchuck v. DEP, —- A.3d ——, 2015 WL 3464081 (Pa.Cmwlth. 2015), the Commonwealth Court concluded that whereDEP had not published permit issuance notice in thePennsylvania Bulletin (as is the case with most oil and gas wellpermits), an objector perfected his appeal of a renewed well-drilling permit even though the objector did not file his appealwith the Environmental Hearing Board within 30 days from thedate he received actual electronic notice of the department’saction.

Among other things, the decision chips away at principles ofadministrative finality in the environmental permitting context. Italso casts uncertainty on approvals issued by DEP by allowingobjectors to appeal within thirty days after they actually obtainthe permit in question and learn of its contents rather than thirtydays after receiving actual notice of the department’s action.

In Pennsylvania, DEP is the agency charged with issuing vari-ous permits under a number of environmental statutes, includingoperating permits for oil and gas wells under the PennsylvaniaOil and Gas Act. 58 P.S. §§ 601.101, et seq. DEP is required topublish some, but not all, of its permit authorizations in thePenn sylvania Bulletin. DEP also issues notifications of its actionsthrough its eNOTICE system and publishes information regard-ing its actions on its eFACTS webpage. Subscribers to eNOTICEreceive notice of department actions that link the subscriber tothe eFACTS webpage for information regarding a particularaction.

When the department issues a permit, a person adverselyaffected by that “action” may lodge an appeal to the Environ -mental Hearing Board (EHB), an adjudicative agency that worksmuch like a trial court that holds hearings, hears evidence, andrenders decisions on the department’s actions. Under thePennsylvania Environmental Hearing Board Act, “no action ofthe department adversely affecting a person shall be final as tothat person until the person has had the opportunity to appeal theaction to the board under subsection (g) [relating to the board’sprocedural regulations]. If a person has not perfected an appealin accordance with the regulations of the board, the department’saction shall be final as to the person.” 35 P.S. § 7514(c). Oncefinal, the doctrine of “administrative finality” generally precludesany future challenge to the department’s action. Id.; Departmentof Env. Res. v. Wheeling-Pittsburgh Steel Corp., 348 A.2d 765,767 (Pa. Cmwlth. 1975).

In turn, the board’s regulations provide that “jurisdiction ofthe board will not attach to an appeal from an action of DEPunless the appeal is in writing and is filed with the board in atimely manner[.]” 25 Pa. Code. § 1021.52(a). If the departmentpublishes notice of an action in the Pennsylvania Bulletin, anappeal is timely if it is filed within “[t]hirty days after the noticeof the action has been published in the Pennsylvania Bulletin.”25 Pa. Code. § 1021.52(a)(2). If the department does not publishnotice of its action in the Pennsylvania Bulletin, an appeal istimely if filed within “[t]hirty days after actual notice of the

action[.]” Id. (emphasis added). In addition,the board’s regulations allow a personaggrieved to file an appeal and amend it asof right within 20 days after the original fil-ing to include additional objections. 25 Pa.Code. § 1021.53(a).

In a previous decision, the Common -wealth Court defined the type of “notice”that triggers an appeal period under theboard’s regulations. In Milford TownshipBoard of Supervisors v. Department ofEnvironmental Resources, 644 A.2d 217,219 (Pa. Cmwlth. 1994), the court conclud-ed that “[c]onstitutionally adequate notice ofadministrative action is notice which is rea-sonably calculated to apprise interested par-ties of the pendency of the action and affordthem an opportunity to present their objec-tions.”

In Harvilchuck, the CommonwealthCourt was called up to decide whetherLaurence Harvilchuck perfected his appealof a renewed well-drilling permit issuedto WPX Energy Appalachia, LLC forthe McNamara 39 11H well whenHarvilchuck received eNOTICE of thedepartment’s action but did not file an appeal within the 30 daysfrom the date of that electronic notice.

On January 1, 2013, Harvilchuck, a subscriber to the depart-ment’s eNOTICE service, received email notification that thedepartment issued a well-drilling permit to WPX. Three dayslater, Harvilchuck requested records from the department pur-suant to Pennsylvania’s “Right to Know” Law (RTKL, the state’sequivalent to FOIA) and received a copy of the well permit onJanuary 25, 2013. Harvilchuck timely appealed the original per-mit on January 28, 2013.

On September 25, 2013, the department issued arenewed well-drilling permit to WPX. Harvilchuck receivedemail notification on September 27, 2013 (informing him thatthe permit application had changed) and on September 30, 2013(informing him that the permit authorization had been updated).Both email notifications linked to the eFACTS webpage. On bothdays Harvilchuck received email notifications, he submittedRTKL requests regarding the permit application and otherrecords, as well as a copy of the renewal permit. After thedepartment requested several extensions to respond to the RTKLrequest, the department provided Harvilchuck with a copy of therenewal permit on October 24, 2013. Harvilchuck did not lodgehis written appeal of the renewal permit to the EnvironmentalHearing Board until November 6, 2013.

The department filed a motion to dismiss the objector’s appealas untimely because he had “actual notice” of the permit actionupon receipt of the eNOTICE email and submission of his RTKLrequest for a copy of the permit at the latest on September 30,2013. In response, Harvilchuck argued that he lacked sufficientinformation to determine whether he was adversely affected bythe department’s action until he received an actual copy of therenewal permit on October 24, 2013.

Despite two strong dissents, the Environmental Hearing Boardgranted the department’s motion to dismiss Harvilchuck’s appeal

George A.Bibikos

Travis L.Brannon

Authors:

Page 16 The PIOGA Press

as untimely. Although the EHB stated that eNOTICE andeFACTS together did not constitute actual notice alone, the EHBconcluded that Harvilchuck had sufficient information to lodgean appeal to the renewed permit for the well based on his knowl-edge of the original permit, the fact that the renewed permit andoriginal permit were identical, and the fact that he receivednotice on September 30, 2013, informing him that the depart-ment renewed the permit. In addition, the EHB reasoned thatHarvilchuck could have lodged his appeal within 30 days ofSeptember 30, 2013, and filed a subsequent amendment as ofright within 20 days after the original filing.

On appeal, the Commonwealth Court reversed and remandedthe matter back to the EHB. The court concluded thatHarvilchuck had “actual notice” on October 24, 2013, when hereceived the renewal permit from the department on October 24,2013. The court reasoned as follows:

The email notifications did not contain adequate informationfor the objector to determine whether he was adversely affectedby the permit, as neither of them contained any informationabout the contents of the permit.

The eFACTS webpage did not reveal any information aboutthe contents of the permit and therefore the objector could notdetermine the permit’s effect on him.

Even though the objector appealed the original permit andknew of its contents, the objector had no way of knowing therenewed permit was identical to the original until he received iton October 24, 2013.

In closing, the court stated that “[q]uite simply, Objector didnot have and could not have had sufficient knowledge to appealthe Renewal Permit until he received written notification of

DEP’s action on October 24, 2013, when DEP provided him witha copy of the permit. Once he received actual notice, he appealedwell within the board’s 30-day appeal requirement.” Harvilchuck,2015 WL 346408 at *5.

As noted in the introduction, the Harvilchuck decision hassignificant implications for permittees in Pennsylvania obtainingapprovals from the department in several respects.

At the outset, the court’s decision may have been influencedby the fact that the department delayed in providing a copy ofthe renewal permit in response to Harvilchuck’s RTKL requeston September 30, 2013, and then seemed to use that delayagainst the objector when moving to dismiss his EHB appeal.Although Harvilchuck’s RTKL requested called for a number ofother public records, an oil and gas permit is a public record sub-ject to disclosure that the department could have provided rela-tively promptly. Thus, the Harvilchuck case may be one in whicha “bad fact” steered the outcome in favor of the objector despitethe significantly broader downsides the decision may engender.

For example, neither the Environmental Hearing Board Act,the board’s regulations, nor the Commonwealth Court’s previousdecision regarding “actual notice” stipulate that an objector has aright to acquire a copy of the permit at issue. The statute, regula-tions and court decisions provide that the trigger for an appeal isthe date on which the objector has notice of the “action,”whether or not the objector has copy of the permit or, for thatmatter, knows of its contents. The notice of the action is thepoint at which the objector has the opportunity to challenge thepermit. At that point, the objector has 30 days to appeal in writ-ing and has an additional 20 days thereafter to amend its appealwith additional objections if necessary. In cases where notice of

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DEP’s action is not published in the Pennsylvania Bulletin, theHarvilchuck decision effectively extends the appeal period tosomething other than within 30 days of “actual notice.”

In addition, the Commonwealth Court’s decision places nobounds on how long the appeal trigger date may be extended.What if an objector waits two months or two years before askingfor and obtaining a copy of the permit? Will the 30-day appealperiod start at that point? The court’s decision but leaves theseimportant questions unanswered.

Finally, before Harvilchuck, the doctrine of administrativefinality foreclosed any challenge to a permit after the 30-dayjurisdictional appeal period lapsed. That doctrine gave permitteessome level of certainty that they may proceed pursuant to theirauthorization without the threat of a future challenge to their per-mit. Under Harvilchuck, the jurisdictional appeal period beginson the unknowable date on which an objector actually receives acopy of the permit in question and reviews its contents.

In the end, the Commonwealth Court’s decision suggests thatpermittees may never have the security of a “final” authorization,given that objectors may have the opportunity to appeal, at leastthose permits where a Pennsylvania Bulletin notice has not beenpublished, at some indefinite time after the department approvesa permit. In light of the decision, those in the regulated commu-nity may wish to monitor the case to see if (1) the department orthe permittee attempt an appeal to the Pennsylvania SupremeCourt and (2) DEP alters its eNOTICE procedures, such as toprovide electronic access to final permits on its website. In themeantime, the regulated community should factor this decisioninto business plans as permittees proceed with their operationsunder their DEP-issued permits. ■

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Eastern Oil & Gas Conference and Trade ShowTime to reserve your exhibit space

For 2015, PIOGA’s Eastern Oil & Gas Conference andTrade Show returns to the Monroeville Convention Center,just east of Pittsburgh. The dates are October 27-28.

The Monroeville facility boasts more than 100,000 square feetof meeting and exhibit space. It sitsnext to a recently renovated Doubletreehotel and is part of a mall complexwith 1,800 free parking spaces. Thereare plenty of hotels, restaurants, storesand other amenities nearby.

We have several new featuresplanned for this year’s show, designedto make it an even better value intoday’s difficult market. Here’s a sam-pling:

• Product and Services Showcase.A new feature this year at majorPIOGA events, the Product andServices Showcase is a set of sessionsduring our meetings that allow servicecompanies, professional firms and sup-pliers to highlight their products in spe-cial presentations to attendees. TheShowcases will be held in an“amphitheater” in the convention center’s North Hall. The ses-sions will be open to all visitors, not just those registered for theconference portion of the event.

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• Producers Row. The exhibit floor will include special areasmanned by representatives from our producer member compa-nies. This will give participants and other exhibitors a chance toget to know more about the companies that have turnedPennsylvania into the nation’s No. 2 gas-producing state.

• Equipment display area. Due to the unpredictability oflate-October weather, we won’t be offering an outdoor exhibit

area. However, the convention center’sNorth Hall with its 26-foot-high ceiling isable to accommodate some sizable equip-ment. (Last time we held the show inMonroeville, we had a 100,000-poundnatural-gas-powered frac truck on dis-play.) Let us know what you’d like to dis-play!

Yes, our industry is facing tough timesdue to poor market conditions. Butinstead of staying away, it’s all the moreimportant to participate in our show tomake new contacts and let the industryknow about new market opportunitiesand fresh ways to make their operationsmore efficient. Smart companies seeopportunities where others see doom andgloom.

Exhibit sales are now open. Weencourage you register early to make sure

you get the best location possible! We’re anticipating an excel-lent event. Go to www.pioga.org/ehhibitor-information-2015 forcomplete details and the link to the online reservation system. ■

February 2014 Page 19July 2015 Page 19

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Safety Committee CornerSafety Committee CornerTrenching and excavation safety

Perhaps you saw one or more of these recent westernPennsylvania news headlines: “Construction worker res-cued after trench collapse in Pittsburgh.” “Man trapped

after trench collapses.” “Crews free man stuck in mud afterButler Co. trench collapse.”

Excavation and trenching are among the most hazardous con-struction operations. The Occupational Health and SafetyAdministration offers the following information about safe prac-tices associated with these activities.

OSHA defines an excavation as any man-made cut, cavity,trench or depression in the earth’s surface formed by earthremoval. A trench is defined as a narrow underground excavationthat is deeper than it is wide and is no wider than 15 feet.

Dangers of trenching and excavation. Cave-ins pose thegreatest risk and are much more likely than other excavation-related accidents to result in worker fatalities. Other potentialhazards include falls, falling loads, hazardous atmospheres andincidents involving mobile equipment. Trench collapses causedozens of fatalities and hundreds of injuries each year.

Protect yourself. Do not enter an unprotected trench!Trenches 5 feet deep or greater require a protective system unlessthe excavation is made entirely in stable rock. Trenches 20 feetdeep or greater require that the protective system be designed bya registered professional engineer or be based on tabulated dataprepared and/or approved by a registered professional engineer.

Protective systems. There are different types of protectivesystems. Sloping involves cutting back the trench wall at anangle inclined away from the excavation. Shoring requires

installing hydraulic or other types of supports to prevent soilmovement and cave-ins. Shielding protects workers by usingtrench boxes or other types of supports to prevent soil cave-ins.Designing a protective system can be complex because you mustconsider many factors: soil classification, depth of cut, watercontent of soil, changes due to weather or climate, surchargeloads (e.g., spoil, other materials to be used in the trench) andother operations in the vicinity.

Competent person. OSHA standards require that trenches beinspected daily and as conditions change by a competent personprior to worker entry to ensure elimination of excavation haz-ards. A competent person is an individual capable of identifyingexisting and predictable hazards or working conditions that arehazardous, unsanitary, or dangerous to employees and who isauthorized to take prompt corrective measures to eliminate orcontrol these hazards and conditions.

Access and egress. OSHA requires safe access and egress toall excavations, including ladders, steps, ramps or other safemeans of exit for employees working in trench excavations 4 feetor deeper. These devices must be located within 25 feet of allworkers.

General trenching and excavation rules: • Keep heavy equipment away from trench edges.• Keep surcharge loads at least 2 feet from trench edges.• Know where underground utilities are located.• Test for low oxygen, hazardous fumes and toxic gases.• Inspect trenches at the start of each shift.• Inspect trenches following a rainstorm.• Do not work under raised loads. Additional Information. Visit OSHA’s Safety and Health

Topics webpage on trenching and excavation at www.osha.gov/SLTC/trenchingexcavation. ■

Don’t be that guy: Keep heavy equipment away from trenchedges.

February 2014 Page 21July 2015 Page 21

Senate approves mine water legislation

Legislation encouraging the oil and gas industry to use acidmine water for hydraulic fracturing has cleared the stateSenate and received the approval of a House committee.

Sponsored by Senator Camera Bartolotta (R-Greene), Senate Bill875 limits potential liabilities for producers who would use minewater in the drilling process.

Under current law, the use of treated mine water by the oiland gas industry is deterred by a lack of clearly defined liabilitylimits. SB 875 establishes two narrow limits on liability. First, itensures an oil and gas well operator cannot be held liable for anyperpetual treatment or abatement of mine drainage or mine poolwater when acquiring treated mine water for well development.This obligation will remain with the mine operator. Secondly,the bill clarifies that a mine operator offering treated mine watercannot be held liable for its offsite use by an oil and gas operator.The legislation does not relieve a mine operator or an oil and gasoperator from any of their respective environmental obligationsunder current law.

“Utilizing treated mine water in natural gas operations holdsthe potential to significantly reduce the withdrawal demands onPennsylvania’s rivers and streams,” said Bartolotta, in a state-ment. “Questions regarding liability are the biggest barrier pre-venting more companies from taking advantage of this environ-mentally friendly process.”

The legislation does not change any environmental safeguardsdesigned to protect public health, and existing water treatment

Minimum royalty legislation reintroduced

Representative Garth Everett (R-Lycoming) has reintro-duced controversial legislation that would prevent uncon-ventional operators from deducting post-production

expenses from royalty payments. House Bill 1391 would make itillegal for royalty payments to be below the 12.5-percent ratespecified in the Guaranteed Minimum Royalty Act. The legisla-tion would apply both to existing and future leases.

Everett offered similar legislation last session. That billreceived committee approval, but did not come to a vote by thefull House of Representatives.

HB 1391, which has 39 cosponsors in addition to Everett,specifies that no deductions of any costs shall result in a royaltypayment less than the one-eighth specified under Act 60 of 1979.The bill allows a lessor to file a civil action to recover paymentsless than the 12.5-percent minimum, along with damages andlegal costs. The court may award triple damages in cases whereit finds the lessee acted willfully in failing to pay the minimumroyalty.

In 2010, the Pennsylvania Supreme Court ruled unanimouslyin Kilmer v. Elexco Land Services, Inc. that producers could cal-culate royalties by subtracting post-production expenses fromsales prices.

HB 1391 is before the House Environmental Resources andEnergy Committee. PIOGA opposes the legislation, arguing thatany contractual disagreements between the parties in an oil andgas lease should be decided by the courts. ■

standards ensure that the water is safely treated before it is trans-ported or used in any drilling process, she said.

SB 875 cleared the Senate Environmental Resources andEnergy Committee with a single negative vote on June 22 andwas approved 34-15 by the full Senate three days later. The pro-posal was referred to the House Environmental Resource andEnergy, which on June 29 sent it on to the full House ofRepresentatives with a 24-2 vote. ■

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Page 22 The PIOGA Press

Litigation challenges forthe Appalachian Basin oiland gas industryThis article highlights an excerpt of the recently published 2015Babst Calland Report – Appalachian Basin Oil and GasIndustry: Rising to the Challenge, Legal and RegulatoryPerspective for Producers and Midstream Operators.

With a large number of regulatory and legal issues unre-solved for the industry, litigation will remain part ofthe landscape. Industry will continue to be required to

litigate interpretations of statutes and rules by federal and stateregulators and environmental groups—with, we hope, favorableoutcomes such as in Citizens for Pennsylvania’s Future v. UltraResources, Inc. Industry will also continue to face issues relatedto the validity of leases and royalty payments. Finally, propertyowner claims of both personal injury and property impact fromoil and gas development activities will continue, fueled by claimsof groundwater contamination and adverse health effects of shaledevelopment.

Federal court refuses to aggregate compressor stations,dismisses Clean Air Act Citizens’ suit alleging violation ofnew source review

In a highly-anticipated decision, the U.S. District Court forthe Middle District of Pennsylvania granted a motion for summa-ry judgment in favor of a Pennsylvania natural gas operator in anair aggregation case filed by a citizens group. The decision wasissued on February 23 in Citizens for Pennsylvania’s Future, andis the latest development in the debate over single source deter-minations. The court agreed with the permitting decisions madeby Department of Environmental Protection that the compressorstations at issue were not located on adjacent properties and thusshould not be treated as a single source of emissions. The courtdisagreed with the Citizens for Pennsylvania’s Future’s(PennFuture) argument that the compressor stations were func-tionally interrelated and, therefore, should be aggregated as a sin-gle source. While the court left some room for the considerationof functional relationships in making single source determina-tions, it determined that such a case would need to have uniquefacts that are outside the normal configurations of pipelines andcompressor stations contemplated by DEP.

Developments in science and in litigation provideopportunities and challenges for defense of watercontamination and nuisance claims

The industry continues to be faced with claims from propertyowners of temporary or permanent drinking well water contami-nation from drilling and fracturing activities. Groundwater in theMarcellus region frequently contains methane and elevated levelsof constituents such as total dissolved solids, barium, strontium,chloride, sodium, iron, manganese and others. In litigation, theproperty owner plaintiffs are required to prove through experttestimony that the contaminants in their well water were causedby the gas development activities and were not pre-existing natu-ral conditions. As the industry widens the area of pre-drill test-ing, many of these suits can be avoided or, if filed, easily defend-ed. Additionally, the ability to use isotopic testing to determine

the source ofmethane found inwater wells is anadded tool at theindustry’s dispos-al to defeat suchclaims.

Litigation alsocontinues to befiled by propertyowners claimingloss of use andenjoyment oftheir propertiesand diminutionof property valuedue to air emis-sions, noiseand/or dust fromgas developmentactivities.Because air emissions are often not conducive to pre- and post-sampling, it can be more difficult to show that the present condi-tions are an increase over baseline. Medical monitoring claimsare frequently included in both suits involving alleged water con-tamination and suits based on alleged air emissions. Many of themedical monitoring claims are abandoned by plaintiffs beforetrial or are dismissed by the court because plaintiffs cannot comeforward with the required expert testimony to prove such claims.Courts have consistently held that in order to prove a claim formedical monitoring all of the below elements must be proventhrough expert testimony: (1) exposure greater than normal back-ground levels; (2) to a proven hazardous substance; (3) caused bythe defendant’s negligence; (4) as a proximate result of the expo-sure, plaintiff has a significantly increased risk of contracting aserious latent disease; (5) a monitoring procedure exists thatmakes the early detection of the disease possible; (6) the pre-scribed monitoring regime is different from that normally recom-mended in the absence of the exposure; and (7) the prescribedmonitoring regime is reasonably necessary according to contem-porary scientific principles.

There is a growing proliferation of questionable scientific andmedical articles being published attempting to link air emissionsto various medical conditions, ranging from commonly occurringrespiratory conditions and nosebleeds to birth defects. It will beimportant for counsel defending these claims to be able to criti-cally analyze these articles through use of reliable and well-qual-ified experts and preclude the admission of the unreliable sciencethrough the use of Daubert motions.

The defense of these suits has also been strengthened by therefusal of courts to allow plaintiffs to bring strict liability claims,finding as a matter of law that unconventional gas drilling is notan ultra-hazardous activity. As a result, plaintiffs are required toprove negligence. Proof that negligent operations resulted in thealleged water contamination or air emissions requires that plain-tiffs retain more experts.

Lease busting—attempts to void or renegotiate terms ofexisting leases

Royalty owners who signed leases for signing bonuses, royal-

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ty rates or other terms that are not as favorable as those currentlybeing offered in their area for new leases continue to look forways to void the leases or the extension or renewal of the leases.

Lease renegotiation by litigation. Many leases obtained dur-ing the early cycle of the Marcellus and Utica boom containrenewal or extension clauses giving the lessee the option toextend the primary term, typically five years, for an additionalfive-year term, upon notice and payment of the same signingbonus as was paid when the lease was initially obtained. Royaltyowners who missed the top of the market or have top lease offersclaim the renewal option cannot be extended unless they are paidthe current market value for signing bonuses and increased royal-ty rates, in effect renegotiating the terms of the lease. The royaltyowners’ attorneys also frequently claim the landman procuringthe lease fraudulently induced the royalty owner to sign by mis-representing the renewal or extension clause, or falsely assertingthat the option could not be exercised without renegotiating thefinancial terms of the lease. So far, the lessees have generallyprevailed in the Appalachian Basin because the courts have heldthe renewal or extension clause is clear and unambiguous, anddoes not require the renegotiation of terms or the payment of abonus at current market rates. Nevertheless, these cases requirevigorous defense to avoid a negative outcome or undue delay.

Another group of court decisions in Ohio has rejected claimsby royalty owners that older lease forms gave lessees too muchdiscretion in determining when the primary term may be extend-ed, thereby creating an unlawful lease in perpetuity. The OhioSupreme Court has accepted one such case for review, whichmay result in a change in previously settled case law in Ohio onthe validity of commonly used lease language. Defense of these

cases requires the filing of motions at the earliest stage to obtaina judicial declaration on the clear and unambiguous terms of thelease to avoid, where possible, costly discovery and litigation. Ifthe court does not dismiss the case or render judgment forlessors at the outset, further defense of the cases can be compli-cated by the fact the landman who procured the lease may nolonger be working for the lessee and/or has no specific recollec-tion of any communications with the royalty owners.

Challenges to held by production leases – duties of diligentdevelopment

Royalty owners who have leases held by production by con-ventional wells envy the financial success of lessors enjoying thefruits of lucrative new lease signing bonuses and increased royal-ty rates associated with shale development. Their attorneys con-tinue to look for ways to void the leases or force drilling ofexploratory or development wells based on claims of breach ofthe express or implied duty to diligently develop.

Vertical formation and abandonment claims. Courtsthroughout the Appalachian Basin generally recognize animplied duty to diligently develop in the absence of an expressprovision in the lease disclaiming implied covenants. The ques-tion becomes whether the failure to drill unconventional shalewells on a lease held by conventional production can result in theabandonment of those formations that are not currently produc-ing. These vertical abandonment claims generally have not beensuccessful as the plain and unambiguous terms of the lease donot support a claim of partial abandonment of a lease. An Ohiocourt has recently rejected such a claim based upon the languageof the lease. Operators should nevertheless be wary of attempts

Page 24 The PIOGA Press

by lessors to obtain a judicial declaration that the prudent opera-tor standard requires the development of all formations. Suchclaims seem to ebb and flow with the commodity price of gas(i.e., they are less viable when the price of gas is low) and aredifficult to prove. Nevertheless, it is an area disgruntled royaltyowners and their counsel continue to analyze to determine if alucrative payday awaits.

Dual purpose leases. Similarly, litigation continues over so-called “dual purpose” leases that provide that the lease is heldpast its primary term by the production of oil or gas, or the useof the premises for the storage of gas or the protection of storedgas in the general vicinity of the lease. Royalty owners who arenot receiving any significant payments for leases being held bystorage of gas or protection of stored gas have initiated litigationseeking to declare that the dual purpose lease is “divisible” andthe formations that are capable of production without disturbingthe storage field have been abandoned. Royalty owners are will-ing to concede that the storage reservoirs and necessary horizon-tal and vertical protective zones remain subject to the lease, butare seeking to terminate the lease as to the shale bearing forma-tions. So far, the courts in Pennsylvania and Ohio have generallyheld that the dual purpose leases are plain and unambiguous andclearly state that the leases are held by production “or” storageof gas. In West Virginia, however, a recent ruling in the UnitedStates District Court for the Northern District of West Virginiahas held otherwise, and is in the process of appeal to the FourthCircuit Court of Appeals.

Royalty litigation Litigation continues over the method of computing and pay-

ing royalties. Post-production costs. With the significant decrease in the

price of gas, disgruntled royalty owners continue to argue thatthe post-production cost deductions in their checks are resultingin improper reduction of revenue. They are looking for avenuesto avoid or reduce such deductions. Courts in West Virginia haveheld that a lessee may not deduct post-production costs unlessthe lease specifically and in detail so states, and have identifiedthe specific post-production costs that may be deducted and howthey may be calculated. Nevertheless, questions continue regard-ing obligations to pay on the volume of gas produced at the well-head. A recent ruling by the United States District Court for theSouthern District of West Virginia held that where the lease callsfor payment on the “gas sold” the deduction for lost and unac-counted for gas incurred prior to the point of sale is not a prohib-ited deduction.

In Pennsylvania, the decision in Kilmer v. Elexco Land Servs.,Inc. seemed to settle that the deduction of post-production costswas allowed under most leases, but litigation continues. A March5 jury verdict in favor of landowners in a class action case chal-lenging the deduction of certain interstate pipeline expenses andmarketing fees incurred downstream from the point of sale mayencourage additional litigation challenging complicated royaltypayment practices. Class action royalty cases also continue to befiled based on claims of fraud, collusion, and other tort claimschallenging post-production cost deductions and seeking to nar-row the holding in Kilmer.

Royalty on natural gas liquids. The royalty calculationprocess is even more complicated for production in the wet gasregions. Older leases typically contemplate the calculation ofpayment of the royalty “at the wellhead,” but the development ofthe infrastructure and technology to segregate and sell far down-stream of the wellhead the components of wet gas has resulted invarious practices among producers on how to calculate royaltyon natural gas liquids.

Courts do not favor affiliated party transactions. One thingis clear: courts in the Appalachian Basin have been very skepti-cal of any post-production cost deductions or sales that relate tocharges by affiliated marketing or gathering companies. Thecourts generally have held that affiliated transactions should beignored as not constituting fair market, arm’s length transactions.The question then becomes, how far down the gathering andtransportation value stream must an operator absorb the post-pro-duction costs before a court will hold, under the terms of thelease, that the lessor is obligated to share prorata post-productioncosts. ■

The 2015 Babst Calland Report was compiled and written by the attorneys of Babst Calland’s Energy and Natural Resources Group and provides legal insights into Marcellus and Utica shale issues, challenges and recent developments facing produc-ers and midstream operators in the Appalachian Basin. For more information regarding litigation challenges facing the oil and gas industry, contact Kathy K. Condo at 412-394-5453 orkcondo@babstcalland.com, or Timothy M. Miller at 681-265- 1361 or tmiller@babstcalland.com. A full copy of the report is available by writing to info@babstcalland.com.

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2014 impact fee payout: $223.5 million

The Pennsylvania Public Utility Commission has postedinformation on its website detailing the final approved2014 distribution of $223.5 million in unconventional well

impact fee payments collected under Act 13 of 2012. Over thepast four years, the PUC has collected and distributed more than$855 million in impact fees.

The PUC’s Act 13 reporting website (www.act13-reporting.puc.pa.gov) provides a detailed breakdown of the pay-ments to county and municipal governments, along with specificson how much money has been collected each year since 2011and how that money has been allocated. The interactive websiteprovides numerous reports regarding the collection and distribu-tion of these funds, along with graphical data regarding the toppaying producers, well count breakdowns, and top receivingcounties and local governments.

Of the $223.5 million collected for 2014, $123.3 million isbeing distributed to county and municipal governments that aredirectly affected by drilling. Also, $18 million goes to state agen-cies and programs listed in Act 13. The remaining $82.2 millionwill be placed into the Marcellus Legacy Fund, which was estab-lished under the act to fund environmental, highway, water andsewer projects, rehabilitation of greenways, and other projectsthroughout the state.

Producer impact fee payments are due to the PUC on April 1each year. Distributions of the money collected by the PUC aredue to county and municipal governments by July 1. ■

Page 26 The PIOGA Press

PJM Grid 20/20A comparison of two winters and lessons learned were the topics of conver-sation at the PJM Grid 20/20 Focus meeting held in Norristown on June 17.Speaking on the performance of all generation resources, ISO New EnglandCEO Gordon Van Welie (pictured at left) said that “renewables can’t be fullyrelied on in winter months where demand is high.”

Admitting to the Federal Energy Regulatory Commission’s backlog, as wellas the steep learning curve ahead for Commissioner Norman Bay, outgoingFERC Commissioner Phillip Moeller (below) suggested to the gas-electricstakeholders in attendance to continue to provide historical knowledge, i.e.the incredible economic benefit ofopen access, to the new commission.“Looking out (into the future) is notone of the commission’s beststrengths,” he emphasized. ChairmanMoeller also took this opportunity torecognize and thank the RTOs andeveryone who operationally coordinat-ed efforts of pipes and lines to main-tain reliability to consumers when weexperienced colder than normal tem-peratures during the polar vortices.

PennEast projects needs supportShow your support for energy infrastructure development that

will help deliver local natural gas to market. Encourage your leg-islators and the Federal Energy Regulatory Commission (FERC)to help bring the PennEast Pipeline Project to life.

Construction of the approximately 114-mile PennEastpipeline would do more than help Pennsylvania and New Jerseyconsumers receive safe, affordable, reliable, locally producednatural gas. It would also enable the United States to take

another step toward vital energy independence, and the result-ing decrease in energy costs will keep Pennsylvania’s manufac-turing industry on a continuing path toward prosperity.

To join in advocating for this important project and responsi-ble natural gas development, visit www.ferc.gov/docs-filing/ecomment.asp.

PennEast also has created a member-only advocacy portalwhere you’ll find a toolkit of resources, including sample lettersand social media messaging. Use this link to register now:penneastpipeline.com/show-your-support.

Where in the World is the PIOGA Outreach Team?

EIA 2015 Energy ConferenceThe Energy Information Administration hosted the 2015Energy Conference in Washington, D.C., June 15-16. Contentwas much less diverse as compared to 2014, with anemphasis on ending the oil export ban and the need for refin-ery options. Speakers on the hydrocarbon gas liquids trackincluded Alan Farquaharson, senior VP of Range Resources,and Renato Monteiro, VP at Braskem (pictured at the lec-turn). Both spoke on NGL downstream markets—Range onNGL uplift and ethane feedstock projects, and Braskem onthe switch from naphtha to ethane for petrochemical proj-ects—noting that feedstock availability and cost advantage, arobust oil and gas industry, and an investment climate withlonger-term stability all are favorable market indicators thatattract plastic manufacturers to re-shore. American ChemistryCouncil data suggest approximately 450 plastic processorprojects in 42 states.

February 2014 Page 27July 2015 Page 27

Atotal of 48 individuals have been appointed to participateon the Department of Environmental Protection’sPennsylvania Pipeline Infrastructure Taskforce. The

group of experts and stakeholders will recommend policies,guidelines and best practices to guide the build-out of pipelineinfrastructure expected to take place across Pennsylvania duringthe next decade.

The task force is made up of representatives from state agen-cies, the legislature, federal and local governments, the pipelineand natural gas industries, and environmental groups. More than200 people applied to participate.

“Governor Wolf has charged the task force with crafting aninnovative, collaborative and responsible approach to pipelinedevelopment that balances environmental protection with eco-nomic opportunity,” said DEP John Quigley in a news release.“Through smart planning, Pennsylvania can experience econom-ic prosperity, achieve energy security, and protect the environ-ment and communities.”

The members will define a set of recommendations and bestpractices for planning, siting and routing pipelines; amplifyingand engaging in meaningful public participation; maximizingopportunities for predictable and efficient permitting; employingconstruction methods that reduce environmental and communityimpacts; and developing long-term operations and maintenanceplans to ensure pipeline safety and integrity. The task force willprovide a report of recommendations to Governor Tom Wolf byFebruary 2016.

The task force will be informed by an additional 101 individ-uals, serving on 12 workgroups, who will focus on such issues aspipeline safety and integrity, siting and routing, environmentalprotection, conservation, agriculture, emergency preparedness,natural gas end use, county government, local government, pub-lic participation, workforce and economic development, and his-torical, cultural and tribal issues.

The first meeting of the task force will be held July 22 atDEP’s South-Central Regional Office in Harrisburg.

Task force appointeesState government

• John Quigley, secretary, DEP • Dennis Davin, secretary, Department of Community and Economic

Development• Karen Murphy, secretary, Department of Health• Leslie S. Richards, secretary, Department of Transportation• David Sweet, special assistant, governor’s office• John Hanger, secretary, policy and planning, governor’s office• Dan Devlin, state forester, Department of Conservation and Natural

Resources• Michael F. Smith, executive deputy secretary, Department of

Agriculture• Richard D. Flinn, Jr., director, Pennsylvania Emergency Management

Agency• Heather Smiles, chief, Division of Environmental Services,

Pennsylvania Fish and Boat Commission• Michael R. DiMatteo, chief, Division of Environmental Planning and

Habitat Protection, Pennsylvania Game Commission• Sarah Bellew, deputy state historic preservation officer, Pennsylvania

Historic Museum Commission• Paul Metro, manager, Gas Safety Division, Pennsylvania Public Utility

Commission• David Smith, property management administrator, Pennsylvania

Turnpike Commission

Appointees announced for DEP’s Pipeline Infrastructure TaskforceFederal government

• David Hanobic, Federal Energy Regulatory Commission• Colonel Ed Chamberlayne, U.S. Army Corps of Engineers, Baltimore

District• Steve Tambini, Delaware River Basin Commission

External stakeholdersAgriculture• David Messersmith, Penn State Extension, Wayne CountyConservation and natural resources• Mark Gutshall, LandStudiesConventional oil and gas• Nicholas Geanopulos, Geanopulos RepresentationsCounty government• Kathi Cozzone , Chester County commissionerEmergency preparedness• William Kiger, PA One Call SystemEnvironmental protection• Davitt Woodwell, Pennsylvania Environmental Council,• Kenneth Klemow, Wilkes University• Michael Gross, Post & Schell, P.C.• Michael Helbing, Citizens for Pennsylvania’s FutureHistoric/cultural/tribal• Curtis Biondich, BL CompaniesLocal government• Marvin Meteer, Wyalusing Township, Bradford CountyNatural gas end users• Cristina Jorge Schwarz, Apex Companies LLC• Wayne Gardner, W E Gardner CompanyPipeline industry• Duane Peters, American Council of Engineering Companies, PA

Chapter• Joe Fink, CONE Midstream Partners LP• Thomas Hutchins, Kinder Morgan• Dave Callahan, MarkWest• Joseph McGinn, Sunoco Logistics Partners LP• Cindy Ivey, WilliamsPipeline safety and integrity • Keith Coyle, Van Ness FeldmanUnconventional oil and gas• Fredrick Dalena, EQT Corporation• Justin Trettel, Rice Energ• Mark Reeves, Shell• Sarah Battisti, Southwestern• Walter Hufford, Talisman Energy/RepsolWorkforce/economic development• Anthony Gallagher, Steamfitters LU420• Don Kiel, of SEDA-COGy

Legislative appointmentsPresident Pro Tempore of the Senate• Terry Bossert, Range ResourcesMinority Leader of the Senate• Andrew Dinniman, Pennsylvania SenateSpeaker of the House• Lauren Parker, Civil and Environmental ConsultantsMinority Leader of the House• William F. Keller, Pennsylvania House of RepresentativesThe list of workgroup participants is available on DEP’s website atwww.portal.state.pa.us/portal/server.pt/community/pipeline_infrastruc-

ture_task_force/22066/workgroups/2072884. ■

“PA Independent Oil and Gas Association”

Page 28 The PIOGA Press

One of PIOGA’s original directors, Roger Willis of Universal WellServices, has retired from the Board of Directors. Before the cre-ation of PIOGA in April 2010, Roger was a long-time director onthe boards of both of our predecessor organizations—theIndependent Oil & Gas Association of Pennsylvania and thePennsylvania Oil & Gas Association. Roger’s last board meetingwas on June 11, when he was thanked by his fellow directors andrecognized for his efforts. We join in offering our appreciation forRoger’s service. Universal’s new representative on the board isWilliam Stoner. From left to right above are PIOGA President &Executive Director Lou D’Amico, Roger Willis and BoardChairman Gary Slagel.

Thanks, Roger!

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Our appreciation for assisting withPIOGA’s Chapter 78 comments

Missing from our article last month about PIOGA’sextensive formal comments on the Department ofEnvironmental Protection proposal final changes to

Chapter 78, Subchapter C regulations was a list of people whocontributed to the PIOGA effort. So late—but certainly betterthan never—thanks go out to:

• Jeff Walentosky of Moody and Associates, who coordinatedthe comment process along with Jean Mosites and Kevin Garberof Babst Calland

• Dave Ochs and Shane Kriebel, Kriebel Companies• Marc Jacobs, Penneco Oil Company• Tom Yarnick, XTO Energy• Craig Mayer, Pennsylvania General Energy• Beth Powell, New Pig Energy• Todd Kunselman, Snyder Brothers• James Pritt, Enervest Operating• Doug Mehan, PennEnergy Resources• Burt Waite and Mark Miller, Moody and Associates• Rich Adams, Chief Oil and Gas• Environmental Committee chairs Paul Hart of Fluid

Recovery Services and Ken Fleeman of ABARTA Energy• PIOGA Chairman Gary Slagel, Steptoe & Johnson• PIOGA staff Kevin Moody, Scott Roberts and Matt Benson• PIOGA President & Executive Director Lou D’Amico

PIOGA Member News

JWF Industries recognized with Governor’sImPAct Award

Team Pennsylvania Foundation President Laura Williamsrecognized JWF Industries for creating jobs and makingpositive contributions to the state’s economy, as part of

the 2015 Governor’s ImPAct Awards. Jessica Petro, Sales andMarketing Coordinator at JWF Industries, accepted the award onbehalf of the company at a ceremony in Hershey. The companyprovides training and tuition reimbursement to employees, pro-vides an increasing number of jobs, and helps the communitythrough an employee-run nonprofit, JWF Cares.

Chesapeake Utilities honored as Corporation ofthe Year

Chesapeake Utilities Corporation has been recognized by theCentral Delaware Chamber of Commerce with its Excellence inBusiness Award for Corporation of the Year. The CDCC present-ed Chesapeake with the award in recognition of the significantlong-term contributions to the Central Delaware communitymade by the Company and its employees. This achievement isbased on contributions to the community and the positive influ-ence Chesapeake’s involvement has had on making CentralDelaware a better place to live and work. ■

Page 30 The PIOGA Press

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has ignored the fact that the Supreme Court invalidated andenjoined nearly all provisions of Section 3215 in its decision onAct 13. Requiring a government agency to obey the law, just asthe agency requires others to obey laws it administers, is a winfor all citizens and the rule of law.

“DEP cannot continue to require our industry to comply withthese invalidated and enjoined provisions without obtainingauthorization from the General Assembly,” Moody continued.“In the meantime, however, DEP has simply ignored the court’sdetermination and is using the Section 3215 decisional processas if the court’s ruling does not exist. This has forced PIOGA totake action on behalf of its members and the industry to ask thecourt to enforce its injunction.”

In Robinson Township, the Supreme Court enjoined Sections3215(b) through (e) from being applied or enforced. The provi-sions establish requirements DEP has imposed on applicants inthe well permitting process. In particular:

• Section 3215(b) required wells be set back specified dis-tances from certain water or wetland features. Subsection (b)(4)required DEP, on application, to waive setback distances if theapplicant provided a plan with additional protective measures.

• Section 3215(c) required DEP to consider, as part of thewell permitting process, the proposed well’s impacts on publicresources including publicly owned parts, forests, game landsand wildlife areas; national or state scenic rivers; national naturallandmarks; habitats of rare and endangered flora and fauna andother critical communities; historical and archaeological sites onthe federal or state list of historic places; and sources used forpublic drinking water supplies in accordance with subsection (b).

• Section 3215(d) allowed DEP to consider comments submit-ted by municipalities and storage operators in making a determi-nation on a well permit and it gives DEP authority to establishadditional protective measures for storage of hazardous chemi-cals and materials associated with the drilling process within 750feet of certain waters.

• Section 3215(e) directed the Environmental Quality Boardto develop regulatory criteria balancing the impact on publicresources withthe optimaldevelopment ofoil and gasresources via per-mit conditionsand an appealprocess.

The SupremeCourt’s majoritydecision in Rob -in son Town shipdeclared thatSection 3215(b)(4) was unconsti-tutional becauseit gave no guid-ance to DEP onhow it was toevaluate waiversubmissions. The

court also found that the remaining provisions of (b) could not besevered from (b)(4) and that (c), (d) and (e) were also part of thatdecisional process and thus could not be severed from (b) and, asa result, were also enjoined.

Despite the Robinson Township decision and the SupremeCourt’s February 2014 denial of DEP’s request to reconsider theinvalidation, the department continues to rely on Section 3215(c)to require that permit applicants comply with the department’sPennsylvania Natural Diversity Inventory (PNDI) Policy relatedto Section 3215(c) as implemented through forms called “Coord -ination of a Well Location with Public Resources” and “PermitApplication to Drill and Operate a Conventional Well” and“Permit Application to Drill and Operate an UnconventionalWell.

PIOGA is asking the court to declare that DEP has no authori-ty to force well applicants to satisfy the requirements of theseforms, and that the department cannot mandate compliance withthe requirements of the PNDI Policy related to Section 3215(c).

Moody emphasized that existing laws and permitting require-ments are more than adequate to fully protect the statutorily des-ignated public resources outside the well permitting process, andthe industry will continue to comply with those laws.

“Natural gas developers protect public resources through vol-untary measures as well as by complying with provisions of fed-eral laws that protect threatened and endangered species, andstate laws administered by the Department of Conservation andNatural Resources, Fish and Boat Commission, and GameCommission,” Moody said.

The Supreme Court documents are available in the news sec-tion of PIOGA’s website. ■

PIOGA petitions Supreme Court: Continued from page 1

Page 32 The PIOGA Press

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February 2014 Page 33July 2015 Page 33

SourcesAmerican Refining Group: www.amref.com/Crude-Prices-New.aspxErgon Oil Purchasing: www.ergon.com/prices.phpGas futures: http://quotes.ino.com/exchanges/?r=NYMEX_NGBaker Hughes rig count: http://gis.bakerhughesdirect.com/ReportsNYMEX strip chart: Emkey Energy LLC, emkeyenergy.com

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Previous Year Currrent Year

Pennsylvania Rig Count

Page 34 The PIOGA Press

Apex Energy (PA) LLC 2 6/16/15 129-28893* Westmoreland Penn Twp6/16/15 129-28892* Westmoreland Penn Twp

Barnes Resources 3 6/9/15 123-47719 Warren Sheffield Twp6/17/15 123-47718 Warren Sheffield Twp6/24/15 123-47713 Warren Sheffield Twp

Branch John D 3 6/3/15 123-47794 Warren Warren City6/15/15 123-47801 Warren Warren City6/30/15 123-47802 Warren Warren City

Cameron Energy Co 9 6/1/15 053-30725 Forest Howe Twp6/5/15 053-30729 Forest Howe Twp6/11/15 053-30723 Forest Howe Twp6/18/15 053-30720 Forest Howe Twp6/23/15 053-30722 Forest Howe Twp6/3/15 123-47828 Warren Sheffield Twp6/9/15 123-47831 Warren Sheffield Twp6/15/15 123-47826 Warren Sheffield Twp6/29/15 123-47829 Warren Sheffield Twp

Catalyst Energy Inc 4 6/1/15 083-56452 McKean Wetmore Twp6/2/15 083-56451 McKean Wetmore Twp6/3/15 083-56453 McKean Wetmore Twp6/30/15 121-45790 Venango Cranberry Twp

Chesapeake Appalachia LLC 4 6/2/15 015-23167* Bradford Tuscarora Twp6/2/15 015-23017* Bradford Tuscarora Twp6/2/15 015-23018* Bradford Tuscarora Twp6/2/15 015-23194* Bradford Tuscarora Twp

Chevron Appalachia LLC 2 6/29/15 059-26751* Greene Dunkard Twp

6/30/15 059-26895* Greene Dunkard TwpCoastal Petro Corp 3 6/18/15 083-56708 McKean Corydon Twp

6/25/15 083-56710 McKean Corydon Twp6/30/15 083-56712 McKean Corydon Twp

D&M Energy LLC 1 6/9/15 039-25793 Crawford Oil Creek TwpEQT Production Co 3 6/16/15 059-26831* Greene Morgan Twp

6/16/15 059-26832* Greene Morgan Twp6/18/15 059-26230* Greene Washington Twp

Frederick Drilling Co & Sons 1 6/2/15 031-25658 Clarion Farmington TwpHolden Oil & Gas 1 6/1/15 123-47619 Warren Watson TwpJKLM Energy LLC 1 6/2/15 105-21850 Potter Summit TwpLendrum Energy LLC 1 6/25/15 121-45230 Venango Cranberry TwpPennEnergy Resources LLC 1 6/6/15 007-20459* Beaver New Sewickley Range Resources Appalachia 14 6/11/15 027-21713* Centre Snow Shoe Twp

6/3/15 035-21308* Clinton Gallagher Twp6/4/15 035-21309* Clinton Gallagher Twp6/29/15 125-27682 Washington Cross Creek Twp6/3/15 125-27566* Washington Hanover Twp6/3/15 125-27526* Washington Hanover Twp6/3/15 125-27560* Washington Hanover Twp6/3/15 125-27565* Washington Hanover Twp6/8/15 125-27626* Washington Nottingham Twp6/11/15 125-27598* Washington S Strabane Twp6/11/15 125-27599* Washington S Strabane Twp6/12/15 125-27597* Washington S Strabane Twp6/12/15 125-27600* Washington S Strabane Twp6/13/15 125-27596* Washington S Strabane Twp

RE Gas Dev LLC 7 6/4/15 019-22400* Butler Center Twp6/4/15 019-22402* Butler Center Twp6/4/15 019-22399* Butler Center Twp6/4/15 019-22401* Butler Center Twp6/9/15 019-22241* Butler Middlesex Twp6/9/15 019-22242* Butler Middlesex Twp6/9/15 019-22239* Butler Middlesex Twp

Seneca Resources Corp 9 6/12/15 023-20207* Cameron Shippen Twp6/12/15 023-20199* Cameron Shippen Twp6/15/15 023-20203* Cameron Shippen Twp6/15/15 023-20200* Cameron Shippen Twp6/17/15 023-20206* Cameron Shippen Twp6/19/15 023-20202* Cameron Shippen Twp6/19/15 023-20201* Cameron Shippen Twp6/21/15 023-20205* Cameron Shippen Twp6/21/15 023-20204* Cameron Shippen Twp

SV ABs Interest Wetmore Proj 1 6/23/15 083-56728 McKean Wetmore TwpSWN Production Co LLC 4 6/12/15 115-21691* Susquehanna New Milford Twp

6/12/15 115-21692* Susquehanna New Milford Twp6/13/15 115-21690* Susquehanna New Milford Twp6/14/15 115-21693* Susquehanna New Milford Twp

Titusville Oil & Gas Assoc Inc 2 6/22/15 053-30681 Forest Harmony Twp6/25/15 053-30660 Forest Harmony Twp

Universal Resources Holdings 5 6/10/15 123-47820 Warren Sugar Grove Twp6/18/15 123-47821 Warren Sugar Grove Twp6/22/15 123-47822 Warren Sugar Grove Twp6/25/15 123-47817 Warren Sugar Grove Twp6/29/15 123-47818 Warren Sugar Grove Twp

XTO Energy Inc 4 6/17/15 019-22415* Butler Donegal Twp6/4/15 019-22390* Butler Summit Twp6/18/15 019-22448* Butler Summit Twp6/19/15 019-22449* Butler Summit Twp

Spud Report:June

The data show below comes from the Department ofEnvironmental Protection. A variety of interactive reports are

OPERATOR WELLS SPUD API # COUNTY MUNICIPALITY OPERATOR WELLS SPUD API # COUNTY MUNICIPALITY

available at www.portal.state.pa.us/portal/server.pt/community/oil_and_gas_reports/20297.

The table is sorted by operator and lists the total wells report-ed as drilled last month. Spud is the date drilling began at a wellsite. The API number is the drilling permit number issued to thewell operator. An asterisk (*) after the API number indicates anunconventional well.

June totalsTotal wells spudded 85Unconventional 49Conventional 36Gas 51Oil 29Combination oil/gas 5

PIOGA Board of DirectorsGary Slagel (Chairman), Steptoe & Johnson PLLC (representing

CONSOL Energy)Sam Fragale (Vice Chairman), Freedom Energy Resources LLCFrank J. Ross (2nd Vice Chairman), T&F Exploration, LPJames Kriebel (Treasurer), Kriebel CompaniesCraig Mayer (Secretary), Pennsylvania General Energy Co., LLCTerrence S. Jacobs (Past President), Penneco Oil Company, Inc.L. Richard Adams, Chief Oil and GasThomas M. Bartos, ABARTA EnergyStanley J. Berdell, BLX, Inc.Rob Boulware, Seneca Resources CorporationCarl Carlson, Range Resources - Appalachia, LLCMike Cochran, Energy Corporation of AmericaDon A. Connor, Open Flow EnergyTed Cranmer, TBC ConsultingJack Crook, Atlas Resource Partners, LPRobert Esch, American Refining Group, Inc.Michael Hillebrand, Huntley & Huntley, Inc.Jim Hoover, Phoenix Energy Productions, Inc. Ron McGlade, Tenaska Resources, LLCJim McKinney, EnerVest Operating, LLCSteve Millis, Vineyard Oil & Gas CompanyGregory Muse, PennEnergy Resources, LLCJoy Ruff, Dawood Engineering, Inc.Stephen Rupert, Texas Keystone, Inc.Jake Stilley, Patriot Exploration CorporationWilliam Stoner, Universal Well Services, Inc.Burt A. Waite, Moody and Associates, Inc.Thomas Yarnick, XTO Energy

Committee ChairsEnvironmental Committee

Paul Hart, Fluid Recovery Services, LLCKen Fleeman, ABARTA Energy

Legislative CommitteeBen Wallace, Penneco Oil CompanyHolly Christie, Steptoe and Johnson, PLLC

Pipeline & Gas Market Development CommitteeBob Eckle, Appalachian Producer Services, LLCRon McGlade, Tenaska Resources, LLC

Health & Safety CommitteePat Carfagna, CONSOL Energy

Meetings CommitteeLou D’Amico, PIOGA

Tax CommitteeDonald B. Nestor, Arnett Foster Toothman, PLLC

Communications CommitteeTerry Jacobs, Penneco Oil Company, Inc.

StaffLou D'Amico (lou@pioga.org), President & Executive DirectorKevin Moody (kevin@pioga.org), Vice President & General Counsel Debbie Oyler (debbie@pioga.org), Director of Member ServicesMatt Benson (matt@pioga.org), Director of Internal Communications

(also newsletter advertising & editorial contact)Joyce Turkaly (joyce@pioga.org), Director of Natural Gas Market

DevelopmentDan Weaver (dan@pioga.org), Public Outreach DirectorDanielle Boston (danielle@pioga.org), Director of AdministrationChris Lisle (chris@pioga.org), Manager of Finance Tracy Zink (tracy@pioga.org), Administrative Assistant

Pennsylvania Independent Oil & Gas Association115 VIP Drive, Suite 210 • Wexford, PA 15090-7906724-933-7306 • fax 724-933-7310 • www.pioga.org

Northern Tier Office (Matt Benson)167 Wolf Farm Road, Kane, PA 16735

Phone/fax 814-778-2291© 2015, Pennsylvania Independent Oil & Gas Association

February 2014 Page 35July 2015 Page 35

PIOGA EventsPIOGA Pig Roast, Equipment Show & Seminar

July 28-29, Seven Springs Mountain Resort, ChampionInfo: www.pioga.org/events/category/pioga-events

18th Annual Divot Diggers Golf OutingAugust 26, Tam O’Shanter of Pennsylvania, Hermitage Info: www.pioga.org/events/category/pioga-events

Eastern Oil & Gas Conference and Trade ShowOctober 27-28, Monroeville Convention Center, MonroevilleInfo: www.pioga.org/events/category/pioga-events

Industry EventsOOGA Summer Meeting

July 27-28, Zanesville (OH) Country ClubInfo: www.ooga.org/events

IOGAWV Summer MeetingAugust 2-4, The Greenbrier, White Sulphur Springs, WVInfo: events.iogawv.com

WVONGA Fall Meeting & Centennial CelebrationSeptember 29-October 2, Oglebay Resort, Wheeling, WVInfo: www.wvonga.com/Attend/Fall2015

IOGANY 35th Annual MeetingOctober 21-22, Buffalo Marriott Niagara, Amherst, NYInfo: www.iogany.org/events.php

IPAA Annual MeetingNovember 9-10, The Ritz-Carlton, New Orleans, LAInfo: hwww.ipaa.org/meetings-events

Calendar of Events

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New PIOGA members — welcome!

DW Environmental Systems, Inc.1203 Clark Street, White Oak, PA 15131412-580-7091www.dwenvironmental.comService Provider — directory categories: equipment supplier,waste/water treatment, drilling fluids systems

Pepper Hamilton, LLP500 Grant Street, Suite 500, Pittsburgh, PA 15219412-454-5000www.pepperlaw.comProfessional Firm — directory category: Legal services

Texla Energy Management, Inc.1100 Louisiana, Suite 4700, Houston, TX 77002713-655-9900www.texlaenergy.comService Provider — directory categories: gas marketing, gas pro-cessing, midstream pipeline

Woolpert4454 Idea Center Boulevard, Dayton, OH 45430937-461-5660www.woolpert.comProfessional Firm — directory categories: engineering, GIS/map-ping services, surveying

115 VIP Drive, Suite 210Wexford, PA 15090-7906

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