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NATURAL GAS—AMERICA’S 

NEW ENERGY OPPORTUNITY: 

CREATING JOBS, ENERGY 

AND COMMUNITY GROWTH 

OVERSIGHT FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

Monday, February 27, 2012, in Steubenville, Ohio 

Serial No. 112-96 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democratic Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Tom McClintock, CA 

Glenn Thompson, PA 

Jeff Denham, CA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Steve Southerland II, FL 

Bill Flores, TX 

Andy Harris, MD 

Jeffrey M. Landry, LA 

Jon Runyan, NJ 

Bill Johnson, OH 

Mark Amodei, NV 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Eni F.H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush D. Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

Ben Ray Luja ́n, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

John Garamendi, CA 

Colleen W. Hanabusa, HI 

Paul Tonko, NY 

Todd Young, Chief of Staff 

Lisa Pittman, Chief Legislative Counsel 

Jeffrey Duncan, Democratic Staff Director 

David Watkins, Democratic Chief Counsel 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

DOUG LAMBORN, CO, Chairman 

RUSH D. HOLT, NJ, Ranking Democratic Member 

Louie Gohmert, TX 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Glenn Thompson, PA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Paul A. Gosar, AZ 

Bill Flores, TX 

Jeffrey M. Landry, LA 

Bill Johnson, OH 

Mark Amodei, NV 

Doc Hastings, WA, ex officio 

Peter A. DeFazio, OR 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Paul Tonko, NY 

Edward J. Markey, MA, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Monday, February 27, 2012 ........................................................ 1 

Statement of Members: 

Johnson, Hon. Bill, a Representative in Congress from the State of Ohio .. 4 

Prepared statement of ............................................................................... 6 

Lamborn, Hon. Doug, a Representative in Congress from the State of 

Colorado ......................................................................................................... 1 

Prepared statement of ............................................................................... 3 

Thompson, Hon. Glenn, a Representative in Congress from the State 

of Pennsylvania ............................................................................................. 8 

Prepared statement of ............................................................................... 8 

Statement of Witnesses: 

Chase, Dr. Robert W., Chairman & Professor, Department of Petroleum 

Engineering and Geology, Marietta College ............................................... 72 

Prepared statement of ............................................................................... 73 

Heller, Dennis J., President & CEO, Stephenson Equipment, Inc., 

Harrisburg, Pennsylvania, on behalf of Associated Equipment 

Distributor ..................................................................................................... 67 

Prepared statement of ............................................................................... 68 

Hughes, Christine T., Owner, Village Bakery, Della Zona Restaurant 

and Catalyst Cafe ́ ......................................................................................... 76 

Prepared statement of ............................................................................... 78 

Johnson, Nathan G., Staff Attorney, Buckeye Forest Council ..................... 81 

Prepared statement of ............................................................................... 82 

Krueger, Faye, Associate Deputy Chief, National Forest System, Forest 

Service, U.S. Department of Agriculture .................................................... 9 

Prepared statement of ............................................................................... 11 

Looman, Ed, Executive Director, Progress Alliance ...................................... 65 

Prepared statement of ............................................................................... 66 

Papai, Michele M., Athens City Council, Ward 3 .......................................... 44 

Prepared statement of ............................................................................... 46 

Pounds, Jack R., President, Ohio Chemistry Technology Council ............... 39 

Prepared statement of ............................................................................... 41 

Simmers, Richard J., Chief, Division of Oil and Gas Resources 

Management, Ohio Department of Natural Resources .............................. 13 

Prepared statement of ............................................................................... 14 

Stewart, Thomas E., Executive Vice President, Ohio Oil & Gas 

Association ..................................................................................................... 26 

Prepared statement of ............................................................................... 28 

Taylor, Roland ‘‘Butch,’’ Business Manger, United Association of 

Plumbers & Pipefitters Local 396 ................................................................ 35 

Prepared statement of ............................................................................... 37 

(1) 

OVERSIGHT FIELD HEARING ON ‘‘NATURAL 

GAS — AMERICA’S NEW ENERGY OPPORTUNITY: CREATING JOBS, ENERGY AND 

COMMUNITY GROWTH.’’ 

Monday, February 27, 2012 

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Steubenville, Ohio 

The Subcommittee met, pursuant to call, at 9:01 a.m., Eastern 

Gateway Community College, 4000 Sunset Boulevard, Lecture Hall 

2102, Steubenville, Ohio, Hon. Doug Lamborn [Chairman of the 

Subcommittee] presiding. 

Present: Representatives Lamborn, Johnson, and Thompson. 

STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Mr. LAMBORN. The Committee will come to order. 

The Chairman notices the presence of a quorum which under 

Committee Rule 3[e] is two Members. The Subcommittee on Energy 

and Mineral Resources is meeting today to hear testimony on an 

oversight hearing on Natural Gas—America’s New Energy Opportunity: Creating Jobs, Energy and Community Growth. 

I want to say it is a pleasure to be here in Steubenville. I want 

to thank you, Representative Johnson, for hosting us. I serve on 

the same Committee as Representative Johnson does on Natural 

Resources, and he is always talking about his home district, the 

people here and the terrain and the needs. It is just such a pleasure to be here. So thank you for your hospitality. 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. 

Mr. LAMBORN. Under Committee Rule 4[f], opening statements 

are limited to the Chairman and Ranking Member of the Subcommittee; however, I ask unanimous consent that both Members 

with me be permitted to give an opening statement and to include 

any of the Members’ opening statement in the hearing record if 

submitted to the clerk by the close of business today. 

Hearing no objection, so ordered. I will recognize myself for 5 

minutes. 

Thank all of you for being here today. I am Congressman Doug 

Lamborn, and I represent the 5th Congressional District of Colorado. I also serve as Chairman of the House Committee Resources 

Subcommittee on Energy and Mineral Resources. Our Subcommittee has broad jurisdiction over onshore and offshore energy 

production on public lands. Many of us on the Committee work to 

ensure the expansion of energy production in this country to create 

job opportunities for hundreds of thousands of Americans, to inVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
2 

crease our energy security and to decrease our reliance on foreign 

oil. 

Today we are here in Steubenville, Ohio to discuss one of the 

most secure sources of energy and technology our country has to 

offer, natural gas production. The natural gas industry has the potential to bring in billions of dollars of Federal revenue, bring 

energy to our national economy, create good paying jobs for thousands of Americans, and most importantly, greatly contribute to 

the economies of the towns and cities that benefit from this development. 

The United States is blessed with some of the richest and largest 

natural gas shale fields in the world. The Marcellus shale, the 

Barnett shale, the Bakken formation are all previously unproductive areas that have just recently become extraordinarily productive gas and oil fields because of hydraulic fracturing, a process 

that is now used in more than 90 percent of oil and gas production 

wells. 

Hydraulic fracturing technology enables the development of unconventional domestic oil and gas resources, such as the Bakken 

formation in North Dakota and Montana, which is thought to hold 

4 billion barrels of oil, second only to Alaska and has kept North 

Dakota’s unemployment rate the lowest in the country. 

By encouraging policies that provide regulatory certainty for the 

energy industry and foster the development of natural gas, there 

is the potential for all communities to enjoy these same benefits 

from energy production. While these technological advances in horizontal drilling have helped spawn the economic development of 

shale oil, it has benefited and revolutionized domestic natural gas 

production by delivering vast amounts of cheap natural gas for the 

U.S. underground shale rock formations. 

Shale gas production is one of the most rapidly expanding trends 

in onshore domestic oil and gas exploration and production today. 

In some areas this has included bringing exploration, production 

and energy to regions of the country that have seen little or no activity in the past. In 2000 shale gas provided 1 percent of our nation’s gas supplies. That is just 12 years ago. Today it is 25 percent. 

Half of the natural gas consumed today is produced from wells 

drilled within the last 3 1/2 years. This technological advancement 

and increased production has allowed once struggling businesses to 

expand into extremely successful business ventures within just the 

last few short years. It has created job opportunities for unemployed Americans and contributed to the coffers of many small 

communities. 

While the Administration frequently touts its record of increased 

energy production and its support for increased natural gas production, their actions prove otherwise. In November the Administration removed over 3,000 acres of the Wayne National Forest from 

the leasing process pending a study on hydraulic fracturing. This 

will simply serve to further delay the creation of American jobs and 

energy production. This action follows a proposal last year by the 

Forest Service to ban the practice of horizontal drilling. 

When questioned about a proposed ban on horizontal drilling, 

BLM Director Bob Abbey said, ‘‘I note for the record that the BLM 

3 

has no ban on directional drilling, and as a matter of policy, the 

Bureau generally encourages its use where appropriate to protect 

sensitive surface resources.’’ 

Additionally, and unfortunately, the Department of the Interior 

has announced plans to release Federal fracking regulations for 

energy production on Federal lands in the near future. Currently 

states are responsible for regulating oil and natural gas development stemming from the use of hydraulic fracturing. These state 

regulations have proved successful in overseeing hydraulic fracturing, and the industry flourished under this regime. 

I also note for the record that in Colorado, if you have a question 

or complaint, whether it is founded or not, you call the state regulators. They are there sometimes the same day and within 24 

hours in every case. 

These proposed BLM Federal regulations are much more stringent, if not unreasonable, beyond any state regulations to date. The 

proposed regulations would likely severely inhibit natural gas production on Federal lands and greatly dissuade companies from pursuing production on these lands. 

I look forward to our witnesses’ thoughts on how we can successfully expand natural gas production and the benefits a robust 

energy industry can bring to local communities while protecting the 

important multiple use mission of our Federal lands and protecting 

the environment responsibly. 

Finally, I want to thank again Mr. Johnson for hosting us here 

in his home district and our colleague from Pennsylvania, Mr. 

Thompson, for being here as well. I regret that none of our Democratic colleagues on the Committee took the interest in this vital 

subject to join us at this hearing. 

I want to thank our witnesses and guests for taking time out of 

your schedules to be with us here today, and I look forward to 

hearing from our panels. 

I would like now to recognize Mr. Johnson for an opening statement and then Mr. Thompson. 

[The prepared statement of The Honorable Doug Lamborn 

follows:] 

Statement of The Honorable Doug Lamborn, Chairman, 

Subcommittee on Energy and Mineral Resources 

Thank you everyone for being here today. I’m Congressman Doug Lamborn and 

I represent the 5th Congressional district of Colorado and also serve as Chairman 

of the House Natural Resources Subcommittee on Energy and Mineral Resources. 

Our subcommittee has broad jurisdiction over onshore and offshore energy production on public lands and we work to ensure the expansion of energy production in 

this country to create job opportunities for hundreds of thousands of Americans, increase our energy security, and decrease our reliance on foreign oil. 

Today we are here in Stubenville, Ohio to discuss one of the most secure sources 

of energy and technology our country has to offer—natural gas production. The natural gas industry has the potential to bring in billions of dollars of federal revenue, 

create good-paying jobs for thousands of Americans and most importantly greatly 

contribute to the economies of the towns and cities that benefit from this development. 

The United States is blessed with some of the richest and largest natural gas 

shale fields in the world. The Marcellus Shale, Barnett Shale and Bakken Formation are all previously unproductive areas that are now extraordinarily new productive gas and oil fields because of hydraulic fracturing—a process that is now used 

in more than 90% of oil and gas production wells. Hydraulic fracturing technology 

is enable the development of unconventional domestic oil and gas resources, such 

4 

as the Bakken Formation in North Dakota and Montana, which is thought to hold 

4 billion barrels of oil—second only to Alaska, and has kept North Dakota’s unemployment rate the lowest in the nation. By encouraging policies that provide regulatory certainty for the energy industry and foster the development of natural gas, 

there is the potential for all communities to enjoy these same benefits from energy 

production. 

While these technological advances in horizontal drilling have helped spawn the 

economic development of shale oil, it has primarily benefited and revolutionized domestic natural gas production by delivering vast amounts of cheap natural gas from 

U.S. underground shale-rock formations. Shale gas production is one of the most 

rapidly expanding trends in onshore domestic oil and gas exploration and production 

today. In some areas, this has included bringing exploration, production and energy 

to regions of the country that have seen little or no activity in the past. In 2000, 

shale gas provided 1% of our nation’s gas supplies; today it is 25%. Half of the natural gas consumed today is produces from wells drilled within the last 3.5 years. 

This technological advancement and increased production has allowed once struggling businesses to expand into extremely successful business ventures within just 

a few short years. It has created job opportunities for unemployed Americans and 

contributed to the coffers of many small communities. 

While the Administration frequently touts its record of increased energy production and its support for increased natural gas production, their actions prove otherwise. In November the Administration removed over 3,000 acres of the Wayne National Forest from the leasing process pending a study on hydraulic fracturing. This 

will simply serve to further delay the creation of American jobs and energy production. This action follows a proposal last year by the Forest Service to ban the practice of horizontal drilling. When questioned about a proposed ban on horizontal drilling BLM Director Bob Abbey, ‘‘I note for the record that the BLM has no ban on 

directional drilling and, as a matter of policy, the Bureau generally encourages its 

use where appropriate to protect sensitive surface resources.’’ 

Additionally, the Department of the Interior announced plans to release federal 

fracking regulations for energy production on federal lands in the near future. 

Currently, states are responsible for regulating oil and natural gas development 

stemming from the use of hydraulic fracturing. These state regulations have proven 

successful in overseeing hydraulic fracturing and the industry has flourished under 

this regime. 

These BLM regulations go significantly above and beyond any state regulations 

to date and the proposed regulations would likely severely inhibit natural gas production on federal lands and greatly dissuade companies from pursuing production 

on those lands. 

I look forward to our witnesses thoughts on how we can successfully expand natural gas production and the benefits a robust energy industry can bring to local 

communities while protecting the important multiple use mission of our federal 

lands. 

Finally, I want to thanks Mr. Johnson for hosting us here in his home district 

and our colleague from Pennsylvania Mr. Thompson for being here. I regret that 

none of our Democratic colleagues on the Committee considered this matter important enough for them to join us at this hearing. 

I want to thank our witnesses and guests for taking time out of your schedules 

to be with us today and look forward to hearing from our panels. 

STATEMENT OF THE HON. BILL JOHNSON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. JOHNSON OF OHIO. Thank, Mr. Chairman, for hosting this 

hearing today. I would also like to welcome you and our colleague, 

Representative Thompson, here to Steubenville, the home of Dean 

Martin. I don’t know if you know that or not, but it is. 

Mr. THOMPSON. I know it now. 

Mr. JOHNSON OF OHIO. It is. 

Mr. THOMPSON. That is pretty cool. 

Mr. JOHNSON OF OHIO. Yes. But more importantly to today’s 

hearing, Steubenville sits atop the world’s largest natural gas deposits located in the Marcellus and the Utica shale. This hearing 

today will shed some light on the many direct and indirect ecoVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
5 

nomic opportunities that are coming to Eastern and Southeastern 

Ohio because of oil and gas development, both new and old technologies. But it is not just Ohio. 

America is blessed with the largest energy reserves in the world 

and according to the Congressional Research Service, the United 

States tops Russia, Saudi Arabia and China when it comes to reserves of oil, natural gas and coal. 

Harnessing these resources is critical to Ohio’s economic prosperity. Right here in Ohio it is estimated we could see up to 

200,000 new good paying jobs come to Ohio with increased natural 

gas and oil production. But the job opportunities that will come 

from natural gas aren’t isolated simply to harvesting the resource. 

These new job opportunities will be in supporting industries like 

manufacturing, housing, retail, entertainment and service industries, just to name a few. 

In the past few weeks alone, private companies not directly involved in the harvesting of the oil and gas have announced hundreds of millions of planned investments that will create hundreds, 

if not thousands, of direct and indirect jobs. This is just the tip of 

the iceberg, ladies and gentlemen. However, you don’t need to take 

my word for it, because ABC World News report came here right 

to Steubenville last October and highlighted the economic development that is coming to town. In the report the anchor stated that 

300 jobs had already come to Steubenville and that another 10,000 

jobs would be created over the next 3 years. 

While unemployment in Steubenville is still too high and above 

the national average at 9.9 percent, this is a huge improvement 

from when it was as high as 15 percent back in 2010. As we all 

saw last week, it is not just the private sector and individuals that 

are benefiting from this development. The City of Steubenville has 

also taken advantage of their resources. Between selling excess 

water to companies and by leasing land at the old landfill in town, 

Steubenville will now have extra money to make long-term investments to improve infrastructure, money that they otherwise would 

not have had. 

As I meet with senior executives and CEOs of the companies 

coming to Ohio to develop the natural gas resources, I always 

stress two very important points. In fact, I told the CEO of Hess 

Corporation, whose company will be drilling at the old city landfill 

in town, these important conditions when he came to visit with me. 

I tell these executives that they need to hire as many Ohioans as 

possible. These resources belong to the hard-working people of 

Eastern and Southern Ohio, and Ohioans deserve to be the ones as 

much as possible working on the rigs and the associated projects. 

That is why I have been working with Eastern Gateway Community College and other educational institutions, trade unions like 

the pipefitters union represented here by Butch Taylor, and the 

energy companies, to ensure that our labor force has the skills necessary for the jobs, that they are given first priority when hiring 

starters. I also tell them that Ohioans who decide to lease their 

land for development must be treated fairly by their companies. 

Ohioans deserve to be given a fair shake by these companies and 

should not be taken advantage of. 

6 

All of these executives have given me their word to follow these 

conditions, and, ladies and gentlemen, I will hold them accountable 

if they do not live up to their word. 

We have an opportunity to usher in a new era of American 

exceptionalism with Ohio energy development if only the Federal 

Government stays out of the way. However, the Federal Government is doing everything it can to stand in the way of growing our 

economy and creating jobs through increased domestic energy production. The Department of the Interior is in the process of developing new rules regulating hydrofracking on Federal lands that 

will serve as the blueprint for the Federal EPA rules and regulations that could stop all of this development in its tracks. 

As we will hear from Mr. Simmers from the Ohio Department of 

Natural Resources later, the State of Ohio has been regulating hydraulic fracturing for over 60 years and we do not need bureaucrats 

from Washington, D.C. telling Ohio’s regulators how to do the job 

they have already been doing responsibly for decades. I trust Ohio 

and Ohioans to know what is best for Ohio rather than unelected 

bureaucrats in Washington. 

I must also point out that while there have been a lot of scare 

tactics on the issue of hydraulic fracturing being thrown around 

lately, the fact remains that there has not been one single case in 

the over 100 million hydraulic fracturing jobs nationwide that has 

resulted in the contamination of drinking water. 

Mr. JOHNSON OF OHIO. Furthermore, when there were issues 

with the earthquakes in the Youngstown area because of nearby injection wells, the Governor and state regulators acted quickly and 

shut down the wells. The Governor also ordered additional monitoring of the injection wells to ensure early detection of the injection wells and to monitor for future seismic activity. They took immediate, prompt and prudent action to base their decisions on 

science and fact, not on political rhetoric or scare tactics. 

Mr. Chairman, thanks again for taking the time to come to Steubenville today all the way from Colorado to draw attention to the 

excitement and the vast economic potential around energy development in Eastern and Southeastern Ohio. 

With that, I yield back the balance of my time. 

[The prepared statement of The Honorable Bill Johnson follows:] 

Statement of The Honorable Bill Johnson, a Representative 

in Congress from the State of Ohio 

Thank you, Mr. Chairman for hosting this hearing and let me be the first to officially welcome you to Steubenville, the home of Dean Martin. 

More importantly to today’s hearing, Steubenville sits atop the world’s largest 

natural gas deposits located in the Marcellus and Utica Shale formations. 

This hearing today will shed light on the many direct and indirect economic opportunities that are coming to Eastern and Southern Ohio because of oil and gas 

development using both new and old technology. 

But it’s not just Ohio. America is blessed with the largest energy reserves in the 

world and according to the Congressional Research Service, the United States tops 

Russia, Saudi Arabia, and China when it comes to reserves of oil, natural gas, and 

coal. 

Harnessing these resources is critical to Ohio’s economic prosperity. Right here in 

Ohio—it is estimated that we could see up to 200,000 good-paying new jobs come 

to Ohio with increased natural gas and oil production and related jobs. 

But the job opportunities that will come from natural gas aren’t isolated simply 

to harvesting the source. These new job opportunities will be in supporting indusVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6621 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
7 

tries like manufacturing, housing, retail, entertainment, and service—to name a 

few. 

In the past few weeks alone private companies not directly involved in the harvesting of the oil and gas have announced hundreds of millions of planned investment that will create hundreds if not thousands of direct and indirect jobs. This is 

just the tip of the iceberg. 

However, you don’t need to take my word for it because ABC World News report 

came right here to Steubenville last October and highlighted the economic development that is coming to town. In the report, the anchor stated that 300 jobs had already come to Steubenville and that another 10,000 jobs could be created in the 

next three years. 

While unemployment in Steubenville is still too high and above the national average at 9.9%, this is a huge improvement from when it was as high as 15% in 2010. 

And as we all saw last week, it is not just the private sector and individuals that 

are benefitting from the oil development, the City of Steubenville has also taken advantage of their resources. 

Between selling excess water to companies and by leasing land at the old landfill 

in town, Steubenville will now have extra money to make long term investments to 

improve infrastructure that they otherwise would not have the money to pay for 

these much needed upgrades. 

As I have met with senior executives and CEOs of the companies coming to Ohio 

to develop the natural resources I always stress two important points. 

And in fact, I told the CEO of Hess Corporation, whose company will be drilling 

at the old city landfill in town, these important conditions when he came to visit 

me. 

I tell these executives that they need to hire as many Ohioans as possible. These 

resources belong to the hard working people of Eastern and Southern Ohio and 

Ohioans deserve to be the ones as much as possible working on the rigs and the 

associated projects. 

That is why I have been working with Eastern Gateway Community College, 

other educational institutions, trade unions like the Pipefitter’s Union represented 

today by Butch Taylor and the energy companies to ensure that our labor force has 

the skills necessary for the jobs and that they are given first priority when hiring 

starts. 

I also tell them that Ohioans who decide to lease their land for development must 

be treated fairly by their companies. Ohioans deserved to be given a fair shake by 

these companies and should not be taken advantage of by these companies. 

All of the executives have given me their word to follow these conditions and I 

will hold them accountable if they do not live up to their word. 

We have an opportunity to usher in a new era of American exceptionalism with 

Ohio energy development if only the Federal Government stays out of the way. 

However, the Federal government is doing everything it can to stand in the way 

of growing our economy and creating jobs through energy development. 

The Department of the Interior is in the process of developing new rules regulating hydraulic fracturing on federal lands that will serve as the blueprint for new 

Federal EPA rules implementing regulations that could stop all of this development 

in its tracks. 

As we will hear from Mr. Simmer from the Ohio Department of Natural Resources 

later, the State of Ohio has been regulating hydraulic fracturing for over 60 years 

and we do not need bureaucrats from Washington D.C. telling Ohio’s regulators how 

to do the job they have already been doing responsibly for decades. 

I trust Ohio and Ohioans to know what’s best for Ohio rather than unelected bureaucrats in Washington. 

I must also point out that while there have been a lot of scare tactics on the issue 

of hydraulic fracturing being thrown around lately, the fact remains that there has 

not been one single case in the over 1 million hydraulic fracturing jobs nationwide 

that has resulted in the contamination of drinking water. 

Furthermore, when there issues with the earthquakes in the Youngstown area because of nearby injection wells, the Governor and state regulators acted quickly and 

shut down the wells. The Governor also ordered additional monitoring of injection 

wells to ensure early detection of the injection wells cause future seismic activity. 

Mr. Chairman, thanks again for taking the time to come out to Steubenville from 

Colorado to draw attention to the excitement and vast economic potential around 

energy development in Eastern and Southern Ohio. With that I yield back the balance of my time. 

8 

Mr. LAMBORN. All right. Thank you. We are going to hear in a 

moment from Mr. Thompson. 

I would ask every member of the audience to be respectful and 

to not interrupt or make noises and to be civil and respect everyone’s rights to listen. Thank you. 

Mr. Thompson of Pennsylvania. 

STATEMENT OF THE HON. GLENN THOMPSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA 

Mr. THOMPSON. Thank you, Chairman. Thanks for hosting this 

Subcommittee bill hearing. And thanks, Mr. Johnson—— 

Mr. JOHNSON OF OHIO. You’re welcome. 

Mr. THOMPSON.—for hosting us here and for, I perceive, the opportunity to serve with you. I want to thank the witnesses on this 

panel and all the panels for taking the time to come out and to provide your expertise and your opinions. It is greatly appreciated. 

It is good to be in Steubenville. I have already learned a little 

more about Steubenville, though I am a neighbor. I represent the 

Pennsylvania 5th Congressional District. It is a pleasure to be at 

this hearing, Natural Gas-America’s New Energy Opportunity: Creating Jobs, Energy and Community Growth. 

I am from Pennsylvania’s 5th District. This is an issue that is 

very important to the future of this country. This is an industry 

that has been around for a very long time. In fact, my district is 

home to where Colonel Edwin Drake drilled the very first commercial oil well, I think over 152 years ago at this point. In fact, when 

it comes to natural gas, 15 of my 17 counties actually have had 

Marcellus. It has been in that beginning epicenter as part of my 

district. 

This is an important issue. It is a great issue to have a field 

hearing on, to be able to weigh both sides and to look at the opportunity and responsibility that come with it. I am looking forward 

to hearing the witnesses. Myself, personally, have seen what it has 

done in my district to move us toward energy independence, affordable energy, clean energy, and jobs, but also the importance of the 

responsibility side. 

I am glad to see the agencies are represented here today. I know 

in Pennsylvania I work very closely with the same or comparable 

organizations, the Pennsylvania Department of Environmental Protection, to look at what the issues are and the role of state regulation and make sure it is the right regulations and it is there for 

protecting both people and the environment while maximizing this 

opportunity. 

So I am going to yield back at this point and say thank you, once 

again, for hosting this Subcommittee hearing. 

I yield back. 

[The prepared statement of The Honorable Glenn Thompson 

follows:] 

Statement of The Honorable Glenn ‘GT’ Thompson, 

a Representative in Congress from the State of Pennsylvania 

I want to thank Chairman Lamborn for holding this important hearing. And I 

also want to thank Representative Bill Johnson for hosting us here today. 

I also want to thank the witnesses for taking the time out of your day to offer 

your expertise, this is greatly appreciated by this committee. 

9 

It’s great to be in Steubenville. And I’m not too far away, I represent the 5th Congressional District of Pennsylvania. Similar to Ohio’s 6th District, Pennsylvania’s 

5th sits atop the Marcellus Shale. 

My District and the Commonwealth have been producing energy for some time, 

and our state has a long and storied history in energy. 

In fact, Col. Edwin Drake drilled the world’s first commercially successful oil well 

in Titusville in 1859, which is also located in my District. 

More recently, Pennsylvania has been experiencing enormous economic benefits 

with the development and production of the Marcellus shale gas play. 15 of the 17 

counties in Pennsylvania’s 5th District have Marcellus production occurring. 

We’ve added over 100,000 jobs in the state, have lower than average unemployment rates in many counties, and are growing our economy in Pennsylvania. 

Much of this success is directly tied to the Marcellus, energy production, and related industries. This is good for my home state, it’s good for consumers, and it’s 

good for the nation. 

Nationally, hydraulic fracturing in oil and gas shale formations has unlocked previously inaccessible and vast new energy supplies which has lowered energy costs 

in regions across the country, offering new incentives for more businesses to locate 

their operations here in the U.S. and new economic fortune and added jobs to our 

local communities. 

This energy development on state and private lands—regulated at the state 

level—has flourished, and today’s hearing goes to show what’s possible in terms of 

energy production and job creation when the federal government is not there to 

interfere. 

This is an important issue that we must continue to discuss, so that we can look 

at the opportunities as well as the responsibilities that come with development of 

our nation’s domestic resources. 

I look forward to hearing from our panelists. Thank you. 

Mr. LAMBORN. All right. Thank you. We will now hear from our 

witnesses. 

I would like to invite forward Ms. Faye Krueger, Associate Deputy Chief, National Forest System, USDA Forest Service, and Mr. 

Richard Simmers, Chief of the Division of Oil and Gas Resources 

Management of the Ohio Department of Natural Resources. 

Like all of our witnesses, your written testimony will appear in 

full in the hearing record. So I ask that you keep your oral statements to 5 minutes as outlined in our invitation letter to you and 

under Committee Rule 4[a]. With all of our witnesses, after your 

5 minutes are up, you are asked to speak only in response to questions. Microphones are not automatic. Excuse me. I think today 

they are automatic. So that is taken care of. 

The timing lights work like this: When you begin to speak, our 

clerk will start the timer, and a green light comes on. After 4 minutes a yellow light comes on, then the red light after 5 minutes. 

Ms. Krueger, thank you for being here, and you may begin. 

STATEMENT OF FAYE KRUEGER, ASSOCIATE DEPUTY CHIEF, 

NATIONAL FOREST SYSTEM, USDA FOREST SERVICE 

Ms. KRUEGER. Mr. Chairman, Member of the Subcommittee, it is 

a privilege to be here today to discuss the development of natural 

gas on National Forest System lands and the implications for job 

development, energy production, and community growth. I would 

like to describe the national perspective and then describe the situation here in Southeast Ohio on the Wayne National Forest. Again, 

my name is Faye Krueger with the National Forest System. 

The Administration believes natural gas development is an important component of America’s energy portfolio, and it supports 

our nation’s security while contributing to the portfolio of energy 

10 

while considering surrounding communities and protecting our 

landscapes and watersheds. 

Across the country, national forests and grasslands currently 

host over 19,000 operating oil and gas wells. Approximately 4,200 

of those 19,000 wells overlay Federal minerals where the subsurface is Federally owned. Our current estimate is we are producing about 16 billion barrels of oil and 1 trillion cubic feet of natural gas per year. Our analysis shows that this development has 

supported over 52,500 jobs with labor income estimated at approximately $3.5 billion per year. We are currently processing around 

200 permits for drilling or Master Development Plan across the nation, which would further add to the jobs and amount of oil produced and gas. 

Federal gas leases cover about 5.5 million acres of the National 

Forest System lands. Federal royalties from leases on National 

Forest System lands were more than $135 million in calendar year 

2009, and we will be updating these figures for other years. Threefourths of the oil and gas wells on National Forest System lands 

overlay privately held mineral rights. Where the subsurface mineral estate is privately held, Forest Service works closely with the 

state and local government to coordinate appropriate protection of 

surface resources. 

Where National Forests overlay Federal minerals, the Forest 

Service works closely with the Bureau of Land Management. Coordination between the two agencies is outlined in a National 

Memorandum of Understanding where BLM has a primary responsibility for subsurface impacts and the Forest Service has the primary responsibility for surface impacts. Here in the Wayne National Forest there are 1,283 oil and gas wells. Two-thirds of those 

overlay privately held minerals. Since 2006, a total of 12 wells have 

been drilled, three of which overlay Federal minerals and nine of 

which overlay non-Federal minerals. 

Last year responding to an expression of interest from industry, 

five parcels with Federal minerals totaling about 3,300 acres were 

considered for lease sale. These parcels have been identified as 

being available for lease in the 2006 analysis during the revision 

of the Wayne National Forest plan. These parcels are in close proximity to the City of Nelsonville along the Hocking River which 

flows through the City of Athens. Local government officials, the 

President of Ohio University and others sent letters of concern asking that the parcels be withdrawn from the sale until additional 

environmental impacts could be more closely examined. 

In response to the request, the Forest Service and BLM are 

working together to conduct a review of the information. This review simply reflects the need based on existing regulation for the 

Forest Service and BLM to evaluate other technical and environmental information and consider any changed circumstances since 

the decision was made in 2006. This information will inform the 

decision maker whether to proceed with the sale or update the environmental analysis. 

This review also makes use of best scientific and technical information before issuing drilling leases and is more efficient than having drilling leases successfully challenged in court at a later date. 

11 

These parcels sit on the edge of the Utica shale formation. There 

may be some potential for use of horizontal drilling and multistage 

hydrologic fracking and associated use of larger water volumes to 

extract oil and gas. The Forest Service and BLM, through this review, will look at potential environmental impacts that are associated with developing shale gas to determine if effects are still accurate as described from the 2006 analysis. 

I would note that while we are reexamining potential leases on 

Federally owned minerals and on a portion of the Wayne National 

Forest, 3/4 of the 241,000 acres of the Wayne National Forest is 

available for oil and gas development. This includes almost 39,000 

acres which overlay Federal minerals and 142,000-plus acres that 

overlay private minerals. Again, we are committed to contributing 

to the nation’s energy needs and moving forward with developing 

jobs. 

I thank you for the opportunity to appear before you today and 

answer any future questions you may have. 

[The prepared statement of Ms. Kruegar follows:] 

Statement of Faye Krueger, Associate Deputy Chief, 

National Forest System, USDA Forest Service 

Mr. Chairman and members of the Subcommittee, it is a privilege to be here 

today to discuss the development of natural gas on National Forest System lands 

and the implications for job development, energy production and community growth. 

My name is Faye Krueger, Associate Deputy Chief for the National Forest System. 

Accompanying me today is Anne Carey, Supervisor of the Wayne National Forest. 

I would like to describe the national perspective and then describe the situation 

here in southeast Ohio on the Wayne National Forest. 

This Administration believes natural gas development is an important component 

of the all-of-the-above energy portfolio that supports our nation’s energy security, 

improves air quality, and creates jobs. The responsibility of the U.S. Forest Service 

and the rest of the Administration is to contribute to that portfolio while ensuring 

the well-being of surrounding communities, and protecting our landscapes and watersheds. 

Across the country, National Forests and Grasslands currently host over 19,000 

operating oil and gas wells. Approximately 4,200 of those 19,000 wells overlay Federal minerals where the subsurface is federally owned, not privately owned. Our 

current estimate is that these wells are producing approximately 16 million barrels 

of oil and 1 trillion cubic feet of natural gas per year. Our analysis shows that this 

development has supported over 52,500 jobs, with labor income estimated at over 

3.5 billion dollars per year (Henry Eichman, Forest Service Economist, Sept. 20, 

2011—IMPLAN MODEL). In addition, we are currently processing approximately 

200 permits for drilling or Master Development Plans across the nation, which could 

potentially add significantly to the amount of oil and gas produced and jobs supported. 

Federal gas leases currently cover over 5.5 million acres of National Forest System lands. Federal royalties from leases on National Forest System lands were more 

than 135 million dollars in calendar year 2009. We are currently working with the 

Department of the Interior’s Office of Natural Resource Revenue to update those figures. Across the country, the Forest Service is analyzing additional lands which 

could be made available for leasing. 

Three-fourths of the oil and gas wells on National Forest System lands overlay 

privately held minerals. Where the subsurface mineral estate is privately held, the 

Forest Service works closely with state and local government to coordinate appropriate protection of surface resources. 

Where National Forests overlay Federal minerals, the Forest Service works closely with the Bureau of Land Management (BLM). Coordination between the two 

agencies is outlined in a national memorandum of understanding (MOU) where the 

BLM has primary responsibility for sub-surface impacts and the Forest Service has 

primary responsibility for surface impacts. (Memorandum of Understanding between 

United States Department of the Interior Bureau of Land Management and Untied 

States Department of Agriculture Forest Service Concerning Oil and Gas Leasing 

12 

and Operations, signed by Kathleen Clarke, BLM on April 5, 2006 and signed by 

Dale Bosworth, Chief, U.S. Forest Service, on April 14, 2006) 

Here on the Wayne National Forest there are 1,283 oil and gas wells, two-thirds 

(62% or 790 of 1283) of which overlay privately held, non-Federal minerals. A total 

of 12 wells have been drilled since 2006, 3 of which overlay Federal minerals and 

9 of which overlay non-Federal minerals, and all are conventional vertical oil and 

gas wells. The typical foot print for each of these wells, once drilled and initial reclamation is completed, is less than an acre. They produce relatively modest amounts 

of oil and gas. The companies drilling these wells are generally local independent 

producers. Although shale plays (oil and gas trapped in geologic formations of shale 

rock typically 6–8000 feet below the surface), are known to exist beneath the Wayne 

National Forest, the Forest has not yet experienced the deep and horizontal drilling 

and the associated high volume water use needed for that type of multi-stage hydraulic fracturing. 

Last year, responding to an expression of interest from industry, 5 parcels with 

Federal minerals totaling approximately 3,300 acres were considered for a lease 

sale. These parcels had been identified as being available for leasing in a 2006 analysis during the revision of the Wayne National Forest Plan. These parcels are in 

close proximity to the City of Nelsonville along the Hocking River which flows 

through the City of Athens. Local government officials, the President of Ohio University and others sent letters of concern asking that the parcels be withdrawn from 

the sale until environmental impacts could be more closely examined. 

Prior to moving forward with leasing the specific lands in question the Forest 

Service and the BLM are working together to conduct a ‘‘Review of New Information 

(RONI).’’ This review simply reflects the need, based on existing regulations, for the 

Forest Service and the BLM to evaluate new technical and environmental information and consider any changed circumstances since it last made these lands available for leasing in 2006. This review will inform the decision maker whether to proceed with the sale or update the environmental analysis, thereby making sure the 

leasing analysis in the Forest Plan adequately addresses anticipated impacts and 

that any future leases will be legally sound. Ensuring that the Forest Plan makes 

use of the best scientific and technical information before issuing drilling leases is 

significantly better, and more efficient, than having drilling leases successfully challenged in court. 

The parcels lay on the edge of the Utica Shale, an underground geologic formation 

stretching across several mid-western states and containing large amounts of 

trapped gas and oil deposits within the shale. There may be potential for use of horizontal drilling and multi-stage hydraulic fracturing and associated use of larger 

water volumes to extract the oil and gas. While potential surface and subsurface impacts would need to be analyzed, the Forest Service and BLM, through this review, 

will look at potential environmental impacts that are associated with developing 

shale gas to determine if the effects are still accurate as described in the 2006 environmental analysis. Together with the BLM, the Forest Service anticipates completing the review within the next several months to determine whether to proceed 

with sale of leases based on the 2006 analysis or whether changed circumstances 

warrant continuing a more thorough environmental analysis initiated with the 

RONI and providing for further public involvement. We are committed to working 

with local and state government and other members of the public in this process 

in the review of new information. 

I would note that while we are re-examining potential leases on federally owned 

minerals on the Wayne National Forest, including the 3,300 acres of the current 

lease parcels, three-fourths of the 241,000 acre Wayne National Forest is available 

for oil and gas development. This includes almost 39,000 acres which overlay Federal minerals and 142,250 acres which overlay private minerals for which the Federal government does not have a leasing role. 

Again, we are committed to contributing to the nation’s energy needs and look forward to moving forward in developing our nation’s natural gas resources while protecting the well-being of surrounding communities, as well as the landscapes and 

watersheds of our National Forests and Grasslands. 

Thank you for the opportunity to appear before you today and I look forward to 

answering any questions you may have. 

Mr. LAMBORN. Thank you. 

Mr. Simmers? 

13 

STATEMENT OF RICHARD SIMMERS, CHIEF, DIVISION OF OIL 

AND GAS RESOURCES MANAGEMENT, OHIO DEPARTMENT 

OF NATURAL RESOURCES 

Mr. SIMMERS. Mr. Chairman and Members of the Committee, I 

appreciate the opportunity to be here today. 

I am representing Ohio’s Department of Natural Resources. The 

Department of Natural Resources is the primary regulatory authority for oil and gas development in Ohio. We also have a primacy 

program for the underground injection control program with the 

USEPA. I did submit a five-page testimony, but I am going to 

speak off the cuff. 

I am born, raised and educated in Ohio. I have Bachelor’s degrees in biology, geology and a Master’s degree in geology, all from 

the University of Akron. I was hired as a hydrogeologist by ODNR 

to investigate contamination. 

Contamination can occur, but if the proper statutes and rules are 

in place and they are properly enforced, those can be greatly minimized to the point where they are nearly nonexistent. ODNR has 

a very good staff. We oversee oil and gas drilling, production and 

the injection disposal operations very well. As with any kind of 

energy development, drilling for natural gas has its risks. All undertakings of man have some degree of risks. The goal of ODNR 

is to, of course, minimize the potential risks by having a good set 

of standards, which may include statutes, rules, and in Ohio’s case, 

conditions that can apply to permits and then oversee in the field. 

There have been many claims over the past 3, 4 years that hydraulic fracturing has caused many groundwater contamination 

events. That is not accurate. That is not to say that contamination 

cannot occur, but it has not occurred through the direct act of fracturing. The Groundwater Protection Council, which is an organization of states that have injection programs, commissioned a study. 

They posted this study, and Ohio participated in this study. 

The study evaluated groundwater contamination events over a 

25-year period. And as Ohio’s records of contamination were reviewed, it was shown that although contamination did occur and 

did occur for certain reasons, hydraulic fracturing was not a cause 

of contaminations over that 25-year period. 

Fracking has occurred in Ohio for many years. Hydraulic fracturing, as we commonly know it, has occurred since the early 1950s 

in Ohio, but another form of fracturing occurred long before that. 

Like Pennsylvania, Ohio has a very long history of oil and gas development. The fracturing that occurred by hydraulic fracturing 

was done by explosives. Nitroglycerin, dynamite were sometimes 

put down wells to accomplish about the same goal as the hydraulic 

fracturing process. In essence, it breaks the rocks creating greater 

permeability so more oil or gas could be extracted from a particular 

formation. 

In 2010 Ohio completed a comprehensive change of oil and gas 

law within the state. This is associated with Senate Bill 164. Senate Bill 165 was indeed the most comprehensive change to oil and 

gas law in at least a 25-year period. As this bill went through both 

the House and Senate in Ohio and votes eventually took place, 

there was nearly unanimous agreement in approving the bill. That 

agreement reflected, one, a good knowledge by the Ohio Legislature 

14 

in the content of the bill and it also expressed a knowledge that 

the bill was important and effective. 

We have begun to implement that bill, and part of that implementation includes the promulgation of rules. We have begun that 

process. Now, Ohio has gone through a number of reviews, and I 

would challenge the Federal Government to go through similar reviews. Back in 1995, as part of a state review process, Ohio voluntarily allowed others to come into the state. The others included 

members of the Federal Government which included the DOE and 

USEPA as well as other state regulatory programs, the regulated 

industry and environmental groups. These groups came in and reviewed the effectiveness of Ohio’s regulatory program. We had a 

follow-up to that review in 2005. These reviews are available. 

They go through and they identify the effectiveness of different 

portions of the Ohio oil and gas regulatory program. More recently, 

in 2010, we had a review by STRONGER, a group that took over 

these state reviews, to include hydraulic fracturing. Specific standards were developed for review, and, again, the Federal Government, other state governments, environmental groups and the regulated industry came into Ohio and evaluated the effectiveness of 

hydraulic fracturing regulations within Ohio. 

A copy of that review is available under my testimony in an electronic version. What these effectively said was Ohio is very good 

at this. I would challenge the Federal Government to come to the 

states and not just look at what they may provide for us, but come 

to us and ask what can we provide for you. Come to the states with 

the idea that maybe, maybe we do it better than you. And we 

would like you to come to these states. 

Last summer we had USEPA, the enforcement folks from 

USEPA call and ask to come to Ohio so they could evaluate the effectiveness of the Ohio regulatory program. As part of that regulatory review, we had to explain how wells are drilled, how 

fracking occurs and how wastes are disposed, yet they were evaluating our effectiveness. Again, I would encourage the Federal Government to come to the states to find out what they can learn from 

us as well. 

[The prepared statement of Mr. Simmers follows:] 

Statement of Richard Simmers, Chief, Division of Oil and Gas Resources 

Management, Ohio Department of Natural Resources 

Chairman Lamborn and members of the House Subcommittee on Energy and 

Mineral Resources, thank for the opportunity to testify today on behalf of the Ohio 

Department of Natural Resources on this topic that is so critical to protection and 

conservation of our precious water resources and to the future development of energy in a safe and reliable manner. 

I am a professional hydro-geologist, with a Masters degree in Geology from the 

University of Akron and was recently appointed as the Chief of the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management 

(DOGRM). I have spent my entire professional career (26 years) working with the 

DOGRM with an emphasis on groundwater resource protection. I am a resident of 

Stark County, a county with an extensive history of oil and gas resource development. My family is dependent upon our private water well as our sole source of domestic water supply. This is also true for most of my field inspectors and enforcement staff. My staff and I share the strongest of possible convictions regarding the 

importance of protecting Ohio’s groundwater resources. In order to maximize protection of groundwater resources, it is absolutely critical that the states retain authority to permit and regulate the development of oil and gas resources. 

15 

All energy resource development activities have associated environmental and 

public safety risks. The question of our time is ‘‘What is the best regulatory framework for managing those risks?’’ The states currently have authority to permit and 

regulate oil and gas resource development, while the United States Department of 

the Interior, Bureau of Land Management, oversees leasing, issues permits and regulates oil and gas development on federal lands in coordination with the states. 

Today there are some that believe in order to adequately protect public safety; we 

must further expand the federal bureaucracy through passage of the FRAC Act, requiring a federal permit to stimulate a well by hydraulic fracturing. Some environmental NGOs have called for expansion of U.S.EPA’s powers in other areas including rescission of the RCRA exemption, requiring produced water to be managed and 

disposed as hazardous waste, subjecting hydraulic fracturing and produced water 

disposal to the Toxic Release Inventory reporting requirements. The proposed expansion of federal authority would dramatically increase the cost of developing oil 

and gas resources without improving environmental protections. 

Beginning in 2007, a growing number of sources including various media outlets, 

environmental NGO resolutions, and NGO blogs began to claim or imply that thousands of alleged groundwater contamination incidents across the country, including 

Ohio, had been linked to hydraulic fracturing. Collectively, these accounts, including 

the movie Gasland, have had a profound effect on public opinion. As a result, there 

is a tremendous amount of misinformation circulating through the internet about 

hydraulic fracturing. Anecdotal accounts and speculative statements made by persons without credentials or expertise on the topic are circulated, embellished and 

eventually treated and recycled as established fact. In September, 2009, a consortium of 160 national, regional, state, and local environmental and conservation organizations sent a letter to Congress urging sponsorship of the FRAC Act stating that 

‘‘our organizations represent communities across the country that are concerned 

about drinking water contamination linked to hydraulic fracturing operations. Reports of drinking water contamination come from Colorado, Texas, Arkansas, Ohio, 

Pennsylvania, Alabama, and Wyoming.’’ 

As Ohio starts down the path toward shale gas development, state leaders under 

the Kasich administration have been meeting with local government officials to discuss issues and concerns. During those meetings state officials are often surprised 

to learn the breadth of local fears. At a recent meeting one municipal official asked 

what the state was going to do when their municipal groundwater supply was ruined by hydraulic fracturing. Based upon all this official had read, it was not a matter of ‘‘if’’ but ‘‘when’’ they would lose their municipal water well field. On September 6, 2011, a bill (SB No. 213) was introduced to ban hydraulic fracturing in 

Ohio until U.S.EPA had completed their study and the states had implemented all 

regulatory enhancements in response to U.S.EPA recommendations. 

As part of the call for federal oversight, there was a concerted effort to undermine 

state agency credibility. In recent years, the popular literature has painted a picture 

of oil and gas regulatory agency officials as complicit, incompetent, indifferent, and 

an obstacle to positive regulatory reform. The popular portrayal of regulatory personnel stands in stark contrast with the sacrifices and effort that I’ve personally 

seen over the course of my career. I am proud to be a part of an agency composed 

of dedicated and competent public servants who work around the clock to inspect 

oil and gas resource development activities to ensure protection of groundwater resources and public safety, including witnessing of hydraulic fracturing operations. 

The claims that Ohio has identified groundwater resources contaminated by hydraulic fracturing are patently false. Hence, the very premise undergirding the NGO 

demand for a federal takeover is inaccurate and misguided. In August 2011, the 

Ground Water Protection Council (GWPC) posted on line a report entitled State Oil 

and Gas Agency Groundwater Investigations and Their Role in Advancing Regulatory Reforms. This report can be viewed at http://fracfocus.org/publications. The 

study includes an evaluation of Ohio DOGRM groundwater investigations covering 

a 25-year period from 1983 through 2007. I personally participated in most of these 

investigations. Notably, during the 25-year period, Ohio did not find any incidents 

where groundwater contamination was linked to well stimulation including hydraulic fracturing. 

Stimulation by hydraulic fracturing has been a routine part of completing most 

Ohio oil and gas wells in Ohio since 1951. During the study period (1983–2007), the 

DOGRM estimates that nearly 28,000 oil and gas wells were stimulated by hydraulic fracturing. The truth is that the Ohio DOGRM, other state oil and gas regulatory 

agencies, and the regulated industry have stellar track records relative to protecting 

groundwater resources from potential impacts. All energy development activities, including hydraulic fracturing operations, have some level of associated environmental 

and safety risks. The risks associated with hydraulic fracturing are well understood 

16 

and are routinely managed through the diligence of the Ohio oil and gas industry 

and by the DOGRM through enforcement of state regulations. 

Although Ohio has not identified a single groundwater contamination incident 

linked to the specific practice of hydraulic fracturing, the DOGRM has recognized 

the need to improve monitoring and record keeping, including public disclosure of 

chemical additives, and has passed legislation during the past year to accomplish 

those objectives. In Ohio, SB–165 (2010) establishes notification and reporting requirements to improve documentation of the process and composition of stimulation 

fluids including additives. 

Amongst other provisions, SB–165 establishes: 

a. Clear well construction performance objectives that require isolation of all 

Underground Sources of Drinking Water behind cemented surface casing, 

and isolation of petroleum reservoirs prior to, during and after well stimulation operations; 

b. Notification of inspectors prior to commencement of stimulation operations; 

c. Immediate notification of an inspector upon detection of defective cement or 

casing during well stimulation operations; 

d. Submittal of additional records including job logs, pumping and pressure 

charts, and invoices listing additives by volume; and 

e. Mandates for disposal of produced water generated during the post-stimulation flowback process at Class II injection wells. 

The regulatory framework for hydraulic fracturing in Ohio has been evaluated by 

a team of national experts. In December 2010, an independent eight-person team 

appointed by STRONGER completed a review of the DOGRM’s regulatory framework for hydraulic fracturing against a set of national guidelines developed in 2010. 

STRONGER is the acronym for a multi-stakeholder, non-profit organization 

named State Review of Oil and Natural Gas Environmental Regulations, Inc. that 

evaluates state oil and gas agency regulatory standards against a set of national 

guidelines. The original guidelines were developed in 1990 by the Interstate Oil 

Compact Commission (IOCC) and the U.S. Environmental Protection Agency 

(U.S.EPA). The published guidelines developed by state, environmental, and industry stakeholders, provided the basis for the State Review Process, a multi-stakeholder review of state exploration and production (E&P) waste management programs against the guidelines. In 2009, STRONGER expanded their guidelines to include the practice of hydraulic fracturing. The purposes of the State Review Process 

are to document the successes of states in regulating E&P wastes and to offer recommendations for program improvement. 

After an in-depth review of the Ohio hydraulic fracturing regulatory program was 

completed, the multi-stakeholder review team concluded that the Ohio program is 

‘‘overall, well-managed, professional and meeting its program objectives’’. The review team commended the DMRM for the following: 

a) Strengthening Ohio Oil and Gas Law through amendments in Senate Bill 

165 (effective June 30, 2010); 

b) Expanding well completion and hydraulic fracturing reporting requirements; 

c) Reviewing potential contaminant pathways during the permit review process; 

d) Strengthening enforcement tools; 

e) Increasing field enforcement staff levels; and 

f) Improved usage of the website to disseminate information. [A full copy of the 

STRONGER review report can be viewed at www.dnr.state.oh.us/Portals/11/ 

oil/pdf/stronger_review11.pdf Ohio Hydraulic Fracturing State Review] 

The review team recommended that Ohio proceed with plans to promulgate new 

regulations regarding well construction. Draft standards have been developed and 

are currently under review through Governor Kasich’s Business Common Sense Initiative. Once this process is complete, the DOGRM will make final amendments and 

submit the new standards for approval through JCARR. We believe that the new 

well construction rules are amongst the best in the nation and will further strengthen protection of water resources. 

Ohio is not unique in its efforts to strengthen well construction standards or expand reporting requirements for hydraulic fracturing operations including chemical 

disclosure. Ohio actively participates in two state associations, the Ground Water 

Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission 

(IOGCC), which provide forums for state regulators to interact and discuss positive 

regulatory advancements with peers. The states and these associations are proving 

to be the leaders that are driving regulatory enhancements throughout our nation. 

By visiting the GWPC website at www.gwpc.org—Groundwater Protection Council 

one can see the outstanding work that is being led by the diligent efforts of my 

peers in other states. States are best equipped to understand local geologic conditions, define protected groundwater resources, and grasp the unique aspects of peVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
17 

troleum reservoirs within their respective jurisdictional boundaries. States will continue to provide the best regulatory framework. 

While the states have been updating and improving regulatory standards for 

years, only recently did federal government (BLM) announce its intent to update 

their chemical disclosure requirements associated with hydraulic fracturing. While 

anyone can claim to be a leader, the true test of leadership occurs when one turns 

around and determines if anyone is following. With regard to hydraulic fracturing, 

the states have been, and will continue to be the standard bearers. 

In conclusion, Mr. Chairman and Committee members, the states should retain 

regulatory authority over the practice of hydraulic fracturing. The states have established a strong track record of performance, have demonstrated proven leadership, 

and will continue to improve their regulatory standards, data management systems, 

and other programmatic tools necessary to ensure protection of groundwater resources and public safety. 

Again, thank you for allowing me the opportunity to testify before you today with 

an in-depth explanation of shale development in Ohio and the authority given to 

ODNR to regulate it. I’ll be happy to take any questions you may have at this time. 

Mr. LAMBORN. OK. Thank you both for your testimony. We will 

now begin our questions. We will have 5 minutes per Member for 

questions for each round. We will have two rounds for these two 

particular witnesses. 

Mr. Simmers, you talked about the difference between the Federal and the state regulation. I, too, in my home state of Colorado 

believe that they are doing an excellent job. As I mentioned earlier, 

any landowner has a concern, they call them and they are there 

within 24 hours. Sometimes they are there the same day to physically inspect what that concern is. Most concerns end up being 

nothing that the well had anything to do with. It is other issues. 

However, for peace of mind, it is important to have that backup. 

It is important to have that capability. It is important to have that 

regulatory oversight should there be a problem that the drilling 

caused. 

When you compare Federal and state, and I know you have just 

been talking about this, would you rather have the Bureau of Land 

Management oversee or the department that you are in, and then 

why, here in Ohio? You already, I know, explained it, but if you 

could go into a little more detail. 

Mr. SIMMERS. In Ohio we have the expertise. We have the budget 

in place to properly manage a fully staffed regulatory program, and 

we hire trained professionals so they can go out and oversee the 

work that may be associated with drilling, well completion, production or even plumbing. 

We, too, have a public complaint response policy in place. Ohio’s 

policy basically says that when a call is received—we take complaints either as calls or letters—we respond either the same day 

or within 24 hours as well. And we generate written complaints 

and contact the complainant to identify the validity of their complaint, and if indeed they do have a valid complaint, how we address that complaint. 

The state programs are effective, and I know they are effective 

because we are members of a number of organizations. I mentioned 

the Groundwater Protection Council, but we are also members of 

the Interstate Oil and Gas Compact Commission. Through these organizations the states meet on a regular basis. Not only do we 

meet, but we have conference calls and a series of meetings and 

18 

seminars where we share our experiences. We go through what 

works and doesn’t work. 

In this case, Ohio is kind of fortunate. Ohio’s Utica shale is being 

developed after some of the other shale plays are being developed. 

In one sense, we have had the advantage of not going first. So we 

have learned from problems that may have occurred in other 

states, and we talk to those other states very frequently and in 

great detail. 

We have promulgated or created statutes that address it. We are 

promulgating rules right now that will make us even more effective 

at this regulation. 

Mr. LAMBORN. Are there things about Ohio’s geology that are different from the other 49 states? 

Mr. SIMMERS. There can be. Obviously along the state line with 

Pennsylvania, the geology can be very similar. Even with those two 

states, there can be substantial differences in geology. Geology is 

one of the factors you have to take into account when you are regulating a particular agency, organization or industry like oil and 

gas. 

One of the things you have to look at is not only the differences 

in the state or local setting, but also the comprehensive package of 

statutes that may be in place. When I hear that a Frack Act may 

occur and it may address fracking in particular, it kind of bothers 

me, because fracking is only one tiny component of the overall operation. 

If you don’t start out with a good permitting process, if you don’t 

start out with a good well construction—well construction is kind 

of like the foundation of a building. If you don’t do that part right, 

then many problems can occur later. So looking at one little component is not the way to go. You have to look at the comprehensive 

package and see how the statutes and rules relate to one another 

and can be used to strengthen one another. 

Mr. LAMBORN. Thank you. Ms. Krueger, in my remaining time in 

this first round, when do you expect the Forest Service to complete 

their study? 

Ms. KRUEGER. We are looking at the next 3 to 5 months to get 

that study completed on the Wayne National Forest. 

Mr. LAMBORN. I might ask you more about that later. 

At this point, I would like to recognize Representative Johnson. 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. Thank you 

both for your testimony here today. 

Mr. Simmers, you may have responded to some of this already 

in your opening remarks, but how long has the State of Ohio regulated oil and gas development in the state? 

Mr. SIMMERS. As an oil and gas agency since 1965. Any regulation prior to that was mainly in the mining portion of state government, and it had a primary purpose prior to 1965 of protecting underground miners as oil and gas activities may occur in the same 

area. 

Mr. JOHNSON OF OHIO. How long has the state regulated hydraulic fracturing to harvest oil and gas? 

Mr. SIMMERS. Again, it has regulated that practice since the 

agency inception in 1965 and has continued to effectively enforce 

that program. 

19 

Mr. JOHNSON OF OHIO. I know you responded to this or you asserted this earlier, but I want to just get it as a matter of record 

again. In all of that time that the state has been regulating hydraulic fracturing, has there ever been one proven case in which 

the fracking job contaminated drinking water? 

Mr. SIMMERS. No, there has not. That is one of the frustrations 

in that. Misinformation is provided and then perpetuated by individuals, by organizations and by the media. Contamination can 

occur and has occurred, but not related to fracking as the process. 

Mr. JOHNSON OF OHIO. Do you think that the State of Ohio is 

doing an effective job regulating the oil and gas industry and specifically your oversight of hydraulic fracturing? 

Mr. SIMMERS. I know we are regulating this properly and effectively. 

Mr. JOHNSON OF OHIO. Thank you for your answers and again 

for being here today, and I appreciate that. 

Mr. SIMMERS. Sure. 

Mr. JOHNSON OF OHIO. Ms. Krueger, in your testimony announcing that the Wayne National Forest would no longer be participating in the lease sale and I think, if I read the testimony of Supervisor Carey who was going to be here I thought—let me give 

you a quote. Based on new information and increased public interest on natural gas exploration, especially deep horizontal drilling, 

the forest will soon assemble a team of natural resource specialists 

to do further analysis. Is that correct? 

Ms. KRUEGER. Yes, that is correct. 

Mr. JOHNSON OF OHIO. My first question is: What is the new information that came about that led you to this decision? 

Ms. KRUEGER. First, Anne Carey, the forest supervisor on the 

Wayne, is sitting in the audience today. She is here. 

What new information we have is we did not look at what would 

happen with the surface resources for a different type of drilling, 

this horizontal and fracking proposal that is out there, bigger well 

pads, trucks getting in and out. So what was given to us by the 

environmental community, like I said, the university and some 

local concerned citizens, they wanted us to look at those effects. 

So we don’t look at them just as far as water goes. We look at 

them for all of our standards and guidelines in our forest plan. So 

we look at T & E species if it is germane to that. We look at water, 

air, several of our resources, to make sure our standards and 

guidelines are in place should we lease. So what we are trying to 

do is put a pause on the leasing, not stop it, but let that leasing 

move forward and make sure that we have looked at all of our environmental analysis that needs to be looked at. 

Mr. JOHNSON OF OHIO. You stated that a team of natural resources specialists will conduct further analysis. Can you tell me 

who in on the panel? 

Ms. KRUEGER. Our IT team, our interdisciplinary team? 

Mr. JOHNSON OF OHIO. I am sorry? 

Ms. KRUEGER. You want to know what kind of members comprise 

our interdisciplinary team? 

Mr. JOHNSON OF OHIO. Who is on the panel? 

Ms. KRUEGER. Let me ask Anne, and I will find out. 

20 

On our panel for reviewing that is BLM, the state. We have hydrologists, soil scientists. 

Mr. JOHNSON OF OHIO. Are there any specialists from the oil and 

gas industry that have been conducting fracking operations for the 

last 60-plus years on the panel? 

Ms. KRUEGER. No. 

Mr. JOHNSON OF OHIO. I am not sure I understand how we can 

get valid analysis of how hydraulic fracturing is going to affect the 

Wayne without having some specialists that participate in that industry. 

You further stated that this group will review the best scientific 

information available with regard to the surface effects of deep horizontal drilling and lateral hydraulic fracturing. Are you aware 

that EPA Administrator Lisa Jackson, the Federal EPA Administrator, has said in a public Congressional hearing there is no proven case that a fracking job contaminates or has ever contaminated 

the drinking water? 

Ms. KRUEGER. I am not aware of any study that has shown that. 

Mr. JOHNSON OF OHIO. Well, the EPA Administrator has stated 

that. So it would be reasonable to assume that the EPA has conducted those studies; correct? 

Ms. KRUEGER. Correct. 

Mr. JOHNSON OF OHIO. I will yield back. We may have another 

round. 

Mr. LAMBORN. OK. We will have another round. So you will have 

the opportunity to continue. 

Representative Thompson? 

Mr. THOMPSON. Thank you, Chairman. Deputy Chief, it is good 

to see you. 

Ms. KRUEGER. I am the Associate Deputy Chief. 

Mr. THOMPSON. Associate Deputy Chief. Well, maybe I just promoted you. 

[Laughter.] 

Ms. KRUEGER. Thank you. 

Mr. THOMPSON. Actually thank you so much. It is good to see 

you. As you know, my role is on another Committee of jurisdiction, 

the Agriculture Committee. I chair the Subcommittee that has jurisdiction over our national forests. You have been a great partner 

to work with, and I appreciate your work. 

A couple of questions for you. My understanding in that regards, 

under the multiple uses of the national forests—they are not national parks clearly—national forests, here is my understanding, 

and I want to get your reaction if I am anywhere close, that they 

were created really under multiple uses and primarily initially to 

make sure that this nation has the resources that it needs to be 

able to keep this country strong. It is the kind of resources actually 

that built this country. As a part of that multiple use is the access 

to minerals, oils and natural gas. Is that your understanding as 

well? 

Ms. KRUEGER. Correct. We are under the Multiple Use Sustained 

Yield Act, and part of that is providing energy to the American people, absolutely. 

21 

Mr. THOMPSON. If you don’t know the exact numbers of years, 

that is fine. Just approximate. How many years has the Forest 

Service been involved in providing energy resources? 

Ms. KRUEGER. I am thinking from the mid-’40s, mid-’30s, 

hundreds. I have a specialist here in oil and gas. 

Mr. THOMPSON. I know my national forest, which was originally 

and still is an oil field and natural gas field, the Allegheny National Forest, was formed almost 90 years ago actually, and it has 

great multiple uses. Ohio seems wonderful. I invite everybody from 

Ohio to come visit the Allegheny National Forest in Pennsylvania. 

Given the fact we have at least a century for the Forest Service 

to have experience with this, in terms of the subsurface, the 

hydrofracking—because that seems to be the thing that is most 

contentious. So the more discussion on that the better, I think, to 

bring in different perspectives. 

In your experience, has there been negative environmental damage, harm to persons or the environment over that hundred years, 

or it has been 60 years since we have been doing hydrofracking, on 

the Forest Service, just talking about the Forest Service because I 

want to keep you where you have responsibility for. 

Ms. KRUEGER. Again, there have been fracking with oil and gas 

wells, fracking in general, for decades. And so, you know, I believe 

you said it correctly when it is done properly, we don’t have the 

issues. 

Again, we want to make sure that we follow rules and regulations, that we look at all potential environmental impacts and provide for those so that none of that does occur. So what we are doing 

is we are getting prepared to make sure we have everything in 

place when that horizontal hydrologic fracking does occur in the 

forest. So I don’t know of any particular study that has shown negative effects from that. 

Mr. THOMPSON. Right. In fact, before this joint Subcommittee, 

my Subcommittee in Agriculture and Mr. Lamborn’s, we had a 

joint committee. We had representatives from the Forest Service 

and I think it was Director Abbey from the Bureau of Land Management. I specifically asked that question about how many wells 

have been drilled hydrofrack in this country. The answer was a 

million. And I just zeroed it in to the taxpayer-owned lands, Forest 

Service lands, Bureau of Land Management, and his response in 

terms of the environmental impact secondary to hydrofracking— 

and we are talking the act of hydrofracking—the response was 

zero. 

How closely does the Forest Service work with the state environmental regulators and how important is that? 

Ms. KRUEGER. Well, we work closely with the state. It is important to make sure, again, for protection for all the resources. Different states have different water rules, and different states have 

different authorities with EPA. So we do work closely throughout 

the country with our state regulators. 

Mr. THOMPSON. I guess the different rules tend to make sense 

because the geology is a little different. The hydrology is a little different. 

Well, well. Normally they just say the gentleman’s time has expired. 

22 

[Laughter.] 

Voice. That is what happens when you run out of energy. 

Mr. THOMPSON. There you go. You go into the dark. 

One quick clarification because I think I borrowed a few extra 

seconds, Chairman, when the electricity went out. 

In terms of actual subsurface, whether it is taxpayer-owned national forests or government-owned—well first clarification, if the 

taxpayers own the subsurface rights in the forest, is it the Forest 

Service that has jurisdiction or the Bureau of Land Management 

for the subsurface? 

Ms. KRUEGER. For the Federally owned minerals, the subsurface 

is regulated by BLM. 

Mr. THOMPSON. Bureau of Land Management? 

Ms. KRUEGER. Right. 

Mr. THOMPSON. Then can the Forest Service stop, really just stop 

and prevent leasing when the subsurface rights are privately 

owned and held? 

Ms. KRUEGER. When the private mineral rights are privately 

owned, we cannot stop that, correct. 

Mr. THOMPSON. I thank you, Chairman. I yield back. I look forward to the second round. 

Mr. LAMBORN. OK. Thank you. The second round here. 

Ms. Krueger, if the study comes back with certain findings, is it 

possible that there will not be government gas under that particular condition? 

Ms. KRUEGER. As we do this review of new information, if we 

find that something is inadequate in the forest plan the way they 

laid out the standards and guidelines, we would go back and have 

further environmental analysis done. It doesn’t mean we would 

stop the lease, but we would open it up for public comment to give 

us more information. And we would look at what additional standards and guidelines or stipulations we would need to have in order 

to move a lease sale forward. 

Mr. LAMBORN. So you are saying you don’t anticipate it being 

shut down completely? 

Ms. KRUEGER. We don’t anticipate it being shut down. What we 

are looking at, again, is to make sure that as we move forward and 

a different technique is used, that we have the correct environmental standards and guidelines in place to have a successful lease 

program. 

Mr. LAMBORN. You do realize that horizontal drilling, if that is 

the concern, is actually less disruptive to the surface, spot by spot, 

instead of going down and branching out? 

Ms. KRUEGER. Our understanding is and what we are looking at 

is collectively you may have a larger drill pad site, but you won’t 

have as many of those. You will also be using different water quantities, and there could be different truck traffic patterns, that type 

of thing, that go on. So those are the things that we would look at 

in addition to the other surface disturbances that could occur. 

Mr. LAMBORN. Thank you. 

Mr. Simmers, the Utica formation is in general—and I know I 

am asking you to generalize here—but in general, how deep from 

the surface? 

Mr. SIMMERS. Six to 8,000 feet deep in general. 

23 

Mr. LAMBORN. How deep are normal groundwater supplies in 

Ohio? 

Mr. SIMMERS. They can range from a few tens of feet to in a few 

parts of the state in excess of a thousand feet, although the very 

deep groundwaters are not widespread. 

Mr. LAMBORN. So it is generally in the hundreds? 

Mr. SIMMERS. It is generally in the hundreds. Back in the early 

’80s, ODNR adopted the Safe Drinking Water Act as its standard. 

We protect groundwaters in Ohio to a standard of 10,000 milligrams per liter TDS, total dissolved solids. In the early ’80s, we 

mapped the base of that defined strata of water. 

As part of our protective casing program, we required casings 

that are specific to water protection be set through the entire 

length of that USDW or underground source of drinking water. 

Mr. LAMBORN. I will get to that in a second. You said the Utica 

is 6,000 to 8,000 feet. So at a minimum, there is 5,000 to 7,000 feet 

of rock between the water and the gas, a mile of rock or more. 

Mr. SIMMERS. Typically, at least in the easternmost counties, yes. 

Mr. LAMBORN. So what do you do as a regulator to ensure that 

that difference is protected so that no gas gets into the water up 

at the top from the gas down below? 

Mr. SIMMERS. This is part of that comprehensive statute rule 

package. You cannot say let us regulate fracking and do it properly 

without doing all the other component parts of oil and gas regulation. You have to first identify what you want to protect. We have 

done that. You have to then develop a plan to say how you are 

going to protect it. We have done that. 

You have to do very critical reviews of the applications that the 

industry submits to you to make sure they meet those criteria. 

Then you have to have good oversight in the field. You have to actually watch to make sure what is required is being met. Then you 

have to have an authority in cases where the construction did not 

go as it should have, where you can require the company to take 

corrective action if necessary or potentially plug the well and start 

over. 

What we require are multiple layers of steel casings cemented in 

place to form multiple isolation barriers so when the fracking process does occur, there are many, many layers of protection to protect 

the fresh water. 

Mr. LAMBORN. Thank you. I appreciate that answer. Some people, frankly, are not aware of that. It is good to have that explained. 

Now, when the EPA came out, can you clarify, what did they not 

understand? That was mind boggling to me. What did you have to 

explain to them that they didn’t get? 

Mr. SIMMERS. Well, no disrespect to the individuals that came 

out, but they don’t do oil and gas development. They were asked 

to come out, evaluate how effective our regulatory program is. To 

have some idea how effective we were, we had to explain how drilling occurs and how fracking occurs. 

Mr. LAMBORN. They didn’t know that? 

Mr. SIMMERS. No. 

Mr. LAMBORN. Wow. 

Representative Johnson? 

24 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. 

Ms. Krueger, you mentioned that you have a close working relationship with the state Department of Natural Resources and the 

EPA; is that accurate? 

Ms. KRUEGER. With different states different relationships between the Forest Service and the state, yes. 

Mr. JOHNSON OF OHIO. Are there any members of the Ohio State 

Department of Natural Resources or the State Department of the 

EPA on this evaluation panel? 

Ms. KRUEGER. We have been collecting data, and we plan to set 

up a meeting with them next month. 

Mr. JOHNSON OF OHIO. But there are no members, there are no 

formal members of the panel from the state? 

Ms. KRUEGER. Right. 

Mr. JOHNSON OF OHIO. From the state regulators? 

Ms. KRUEGER. No. We have not identified any formal members, 

no, although we will be working with them. 

Mr. JOHNSON OF OHIO. So it is totally a Washington deal. 

Mr. Simmers, has anyone from that panel contacted your office 

for an assessment or your input? 

Mr. SIMMERS. Not that I am aware of. 

Mr. JOHNSON OF OHIO. Deputy Chief Krueger, is the geology of 

the earth the same in Ohio as it would be, say, in Colorado? How 

about something closer to Steubenville. How about over in West 

Virginia or even my colleague’s area over in Pennsylvania, would 

the geology in West Virginia and Pennsylvania be the same as 

Ohio? 

Ms. KRUEGER. Conferring here, it is not exactly the same, but 

there are many similarities. 

Mr. JOHNSON OF OHIO. I didn’t think so. So how then does it 

make sense for the Department of the Interior and possibly the 

Federal EPA to issue a one size fits all rule to hydraulic fracturing 

when it is very clear from Mr. Simmers’ testimony the EPA doesn’t 

even know about hydraulic fracturing? 

Ms. KRUEGER. I understand your question. It is a good question. 

I cannot speak for the Bureau of Land Management or the EPA. 

Mr. JOHNSON OF OHIO. I understand, and I appreciate that. It 

seems to me—and let me make something very clear. I am not a 

no-regulation person. Where it concerns public safety, public 

health, national defense, national security, I believe in common 

sense regulations. I think to me though the regulators in this particular instance who have been doing a wonderful job for many, 

many years right here at home know a lot more about what it 

takes to protect Ohio’s resources than bureaucrats in Washington 

D.C. 

With that, Mr. Chairman, I yield back. Thank you. 

Mr. LAMBORN. OK. Mr. Thompson? 

Mr. THOMPSON. Thank you. 

Chief Simmers, you actually addressed my first question I had 

outlined here, and it was regarding basically groundwater resources being contaminated by hydrofracking and if that hasn’t occurred in Ohio, which you did talk about—you talked about that 

obviously there are some other risks—that what is in place with 

the actual act of hydrofracking protects groundwater. 

25 

I am just curious if you can tell me a little bit about what some 

of those other risks might be when it comes to natural gas, what 

kind of regulations, rules has your agency promulgated to address 

those. 

Mr. SIMMERS. The types of contamination can be multiple. They 

can be brines. They can be crude oils. They can be natural gas that 

can get into the subsurface and potentially even into the sources 

of underground drinking water. That is why it is critical to make 

sure the wells are constructed properly. 

Mr. THOMPSON. So when you say get into the surface, these are 

things that are sitting on the top of surface, on the ground? 

Mr. SIMMERS. Well, it can happen two ways. Contamination can 

occur through the underground or from the surface. We have addressed those potential pathways for the underground sources. It 

doesn’t mean they are totally eliminated. But Ohio places the highest priority on public health and safety and environmental protection. And we have our statutes in place to do that, to accomplish 

that. 

Most of the historic contamination has been associated with surface, either through historic practices which are no longer allowed, 

or through spills that might occur. And those, too, are being addressed through statute and rules. 

Mr. THOMPSON. In your testimony you showed a copy of it, but 

I am looking for it online to get a copy of the report from an organization called STRONGER. Talk a little bit about what is the makeup of that organization. Is it nonbiased? Are there stakeholders 

that represent all aspects, or is this just strictly an industry-driven 

organization? From your testimony, I understand they do an assessment of state oil and gas environmental regulations. 

Mr. SIMMERS. The STRONGER group, which I am going to read 

their title, it is the State Review of Oil and Natural Gas Environmental Regulations. That is the title of the organization. 

This used to be part of what was a state review process that was 

originally run through the Interstate Oil and Gas Compact Commission. When it was in that forum, it was originally funded by the 

Department of Energy and the USEPA. At some point the funding 

dried up. It was a very effective program in its original forum, and 

many of the states, many of the Federal agencies wanted it to continue. 

It now receives private funding to a large degree to continue this 

type of operation, but it is still a multistakeholder organization. 

The Federal Government is still included through the board. 

USEPA, DOE are involved, states, the regulatory program within 

the states, and environmental organizations as well as members of 

the regulated industry are all members of the board of this group. 

Mr. THOMPSON. Congratulations on the state’s, I guess for lack 

of a better word, report card under that organization. 

Mr. SIMMERS. Thank you. 

Mr. THOMPSON. In your opinion, and I know Mr. Johnson and the 

Chairman kind of addressed this, but there is a real push by just 

a few people in Washington to have the Federal Government really 

take over oversight of natural gas drilling, the Frack Act in particular. What are the potential risks of that for making sure this 

industry is done in a proper environmentally sound way? 

26 

Mr. SIMMERS. We have mentioned potential differences in geology 

which are very important to consider. Even with the comprehensive 

statutes and rules that we have on the books in Ohio, we have an 

authority to place site specific conditional requirements on individual permits. You can look at geology as a whole, but you have 

to look at the overall picture, again, from the time you permit a 

well until you begin producing or ultimately plug that well. Conditions can include those that are very specific to a well that might 

be in some proximity to a public water well field. You have to have 

the flexibility to adjust the permit and the operating requirement 

on a particular company to not just the geology, but to many other 

factors as well. 

Mr. THOMPSON. Thank you, Chairman. I yield back. 

Mr. LAMBORN. All right. I want to thank both witnesses for being 

here. I would like to ask that if any of us on the panel have a question for you in writing, that you would respond to those as well. 

Mr. SIMMERS. Of course. 

Ms. KRUEGER. Can I make one more comment or no? 

Mr. LAMBORN. No, because we do have two more panels to hear. 

Thank you. 

I would like to now invite forward the second panel, Mr. Tom 

Stewart, Executive Vice-President of Ohio Oil & Gas Association; 

Mr. Roland Butch Taylor, business manager, Plumbers & Pipefitters Local 396; Mr. Jack Pounds, President of the Ohio Chemistry Technology Council, and Ms. Michele Papai, City Council, 

Ward 3 at the Steubenville City Council. 

Ms. PAPAI. Athens, Ohio. 

Mr. LAMBORN. Excuse me. Athens, Ohio. 

Ms. PAPAI. Thank you, sir. 

Mr. LAMBORN. Like all of our witnesses, your written testimony 

will appear in full in the hearing record. So I ask that you keep 

your oral statements to 5 minutes as outlined in our invitation letter to you and under Committee Rule 4[a]. With all of our witnesses, after your 5 minutes are up, you are asked to speak only 

in response to questions, and the timing lights work with your 5 

minutes first green. Then after 4 minutes it turns yellow, and then 

at the end of 5 minutes, the red light comes up. So thank you for 

being here. 

We will now go to Mr. Stewart. We will just go down the line. 

STATEMENT OF TOM STEWART, EXECUTIVE VICE-PRESIDENT, 

OHIO OIL & GAS ASSOCIATION 

Mr. STEWART. Chairman Lamborn, Ranking Member Holt and 

Committee Members, good morning and welcome to Ohio. 

For over a century and a half, Ohio has been blessed with production of plentiful oil and natural gas resources. At each critical 

moment in our industry’s history, it has been changes wrought by 

technology that has provided producers the ability to explore new 

horizons, and expand the resources base. Today the ability to horizontally drill a deep underground reservoir with exacting precision 

exponentially exposing the base of the reservoir rock to the 

wellbore has created massive efficiencies in our ability to produce 

oil and gas. 

27 

Ohio is now beginning a new era of oil and gas exploration made 

possible by technology that is unlocking reservoirs that until now 

were not accessible. For our entire history, we explored oil and gas 

from reservoirs where it had been trapped after migrating over 

eons from source rock where oil and gas had been formed and 

cooked in nature’s kitchen. Now we are drilling into the actual 

source rocks where most geologists believe 95 percent of the oil and 

gas still remains in place even after feeding the traps that have 

produced all of the oil and gas that we have found to date. 

This is a radical departure from America’s recent understanding 

of energy dependency. The resource shale play resets the clock on 

readily available American-produced oil and natural gas resources 

providing Americans with a secure supply of reliable and efficient 

energy. Already shale production has fundamentally changed domestic energy markets. Past market history tells us that natural 

gas should be priced at a ratio of 6:1 with crude oil, meaning a 

price of $17.50. Instead the markets are pricing natural gas at 

$2.60 or 40:1 of crude. 

In other words, today the industry is providing the American 

consumer an incredible energy bargain providing natural gas 

priced at 15 percent of its intrinsic energy value, a trend that the 

marketplace indicates will continue in the future. It is also enticing 

the chemical industry to reenter the United States and build new 

chemical manufacturing facilities. 

What does this all mean for Ohio? Since 1860, Ohio has produced 

over 8.5 trillion cubic feet of natural gas and 1.14 billion barrels 

of oil. The state’s geologists recently provided a volumetric calculation to estimate the recoverable reserve potential of the Utica 

shale. They reported that should producers extract just 5 percent 

of the oil and gas in place, leaving 95 percent of resource in the 

rock, Utica would generate 15.7 trillion cubic feet of natural gas 

and 5.5 billion barrels of crude oil. This is an astonishing number, 

an enormous perhaps once in a lifetime opportunity. 

Clearly America’s opportunity using shale gas and shale oil resources hinges on the regulatory structure as well as development. 

Managing environmental risk has been a key part of the state and 

Federal regulation. It remains important to keep an appropriate 

balance between these governmental rules. 

States have historically been the regulator of well construction 

and completion. They have the expertise to permit new wells and 

should continue to be the regulatory authority. States and Federal 

agencies share the responsibilities of regulating waste discharges. 

States typically issue direct permits under broad Federal guidelines. The balance is appropriate and should be continued because 

states understand the potential unique issues in this area. 

Because of the diversity of conditions associated with oil and natural gas production, the regulatory process must be flexible and reflect the unique conditions of the state or areas within the state. 

It requires the technical expertise that has been developed in each 

state and which does not exist within some Federal agencies. For 

this reason Federal law has generally deferred to the states for regulation of this industry. Over time states have been engaged in a 

process that validates their regulatory ability, identifies regulatory 

28 

gaps and provides a process to close those gaps and improve respective regulatory programs. 

As mentioned earlier, the state review of oil and natural gas environmental regulations, STRONGER is an independent state 

board and governing body that manages the state review process. 

The process represents a stakeholder-driven collaborative effort 

working together to develop a regulatory framework at the state 

level that effectively protects the environment while recognizing 

unique, historic, geologic and topographic characteristics of oil and 

gas developed among the states. 

STRONGER recently upgraded the review guidelines to include 

a specific section focusing on hydraulic fracturing. Over the past 

year, STRONGER has done frack specific reviews in six states. In 

Ohio, following implementation of new law, STRONGER conducted 

the hydraulic fracturing specific state review. The review concluded 

that the Ohio program was overall well managed, professional and 

meeting its program objectives. The state review process demonstrates the states are the best and most efficient point to regulate the industry’s waste stream. 

Regarding Federal land, over the past several years, new rules, 

policies and administrative actions made it more difficult for oil 

and natural gas producers to operate on Federal and tribal lands. 

The Department of the Interior has recently indicated it is in the 

process of promulgating new rules for hydraulic fracturing. The resultant loss of production not only impacts the Federal treasury, 

but it also hurts businesses and local communities throughout the 

region that rely on multiple use of Federal lands as the backbone 

of the economy. 

The Wayne National Forest located in Southeastern Ohio is an 

excellent example of this. 

Mr. LAMBORN. Mr. Stewart, could you start to wrap up here because our 5 minutes are up. 

Mr. STEWART. The proposed regulations to govern hydraulic fracturing on Federal lands are redundant to what states are already 

doing to manage the environment and doing well according to EPA 

Administrator Lisa Jackson, and will only further delay an already 

slow approval process for oil and gas operations. 

[The prepared statement of Mr. Stewart follows:] 

Statement of Thomas E. Stewart, Executive Vice President, 

Ohio Oil & Gas Association 

Chairman Lamborn, Ranking Member Holt and committee members of the House 

Committee on Natural Resources, Subcommittee on Energy and Mineral Resources, 

good morning and welcome to Ohio. I want to recognize Congressman Bill Johnson 

for his distinguished representation of the people who live within the 6th Ohio Congressional District who are hosting this field hearing today 

I am Thomas E. Stewart, Executive Vice President of the Ohio Oil & Gas Association (OOGA), a state-based trade association representing the common interests of 

over 1,900 members who are engaged in the exploration and production of crude oil 

and natural gas resources within the State of Ohio. The Association has represented 

the Ohio industry since 1947. The Association also is an active cooperating association in alliance with the Independent Petroleum Association of America (IPAA), 

based in Washington D.C. Since 1929, IPAA has represented thousands of independent petroleum and natural gas producers throughout the nation. Independent 

producers drill 90 percent of wells within the United States 

Today’s hearing is focused on the development of America’s reliable energy opportunities, particularly as they relate to new supplies of domestically produced natural 

gas, natural gas liquids and crude oil produced from the resource shale play. I will 

29 

also comment on the regulatory approaches that will help govern development of the 

resource. My comments will focus on how these events are impacting Ohio; the relationship between federal and state-based regulatory policy; and the process that 

validates the long-standing principle that the states are best suited to regulate the 

industry in order to protect the public interest and ensure protection of human 

health, safety and the environment. 

For over a century and a half Ohio has been blessed with production of plentiful 

oil and natural gas resources. At each critical point in our industry’s history it has 

been changes wrought by technology that have provided to producers the ability to 

explore new horizons, expand the resource base, and establish new reserves. Significant events include the development of the rotary drill bit, wire line logging, seismic 

technology lending an eye to what’s underground, and the development of hydraulic 

fracturing in 1947 that by 1953 revolutionized and rejuvenated the productive capacity of wells in Ohio and across the nation. 

Today, the ability to horizontally drill a deep underground reservoir with exacting 

precision, exponentially exposing the face of the reservoir rock to the wellbore, has 

created massive efficiencies in our ability to produce oil and gas. Combined with the 

ability to hydraulically fracture the source rock at intervals along the horizontal lateral wellbore, America’s producers are using advanced technologies to reset the 

clock on available domestic oil and natural gas resources. 

Ohio is now beginning a new era of oil and gas exploration made possible by a 

triumph of technology that is the key to unlocking reservoirs that until now were 

not accessible. Along with horizontal drilling there has been a significant shift in 

our thinking about where to find oil and gas. For our entire history we explored for 

oil and gas in reservoirs where it had been ‘‘trapped’’ after migrating over the eons 

from ‘‘source’’ rocks where the oil and gas had been formed and cooked in nature’s 

kitchen. Now, we are drilling into the actual source rocks where most geologists believe 95% of the oil and gas still remains in place even after feeding the traps that 

have produced all of the oil and gas that we have found to date. This is a radical 

departure for industry from the traditional approach to oil and gas exploration. It 

is a radical departure from America’s understanding of recent years regarding energy dependency and the availability of reliable and efficient energy. For Ohio, the 

result will be the development of vast new supplies of dependable energy and the 

creation of a multitude of jobs in the oil and gas sector as well as other business 

sectors that are counting on this resource to expand authentic economic opportunity. 

In Ohio the Upper Ordovician Utica/Point Pleasant Shale (Utica) is the source 

rock for much of the oil and gas that has been produced in various conventional reservoir traps. The Utica is the newest member of the resource shale play that is revolutionizing oil and gas production in the United States. 

Economic Impact: Already production from the resource shales has fundamentally changed domestic energy markets. Generally it takes 6 Mcf (thousand cubic 

feet) of natural gas to equal the energy found in one barrel of oil. So, over time and 

absent disruptive events natural gas has traded at about a 6:1 ratio to crude oil. 

That is until now. Today crude oil is trading at $105.00 per barrel. The historic 

trend says that natural gas should be priced at about $17.50 per Mcf. However natural gas is trading at $2.60 per Mcf or nearly 40:1. The new and efficient development of natural gas from the resource shale plays is providing the American consumer an incredible energy bargain providing a fuel priced at 15 percent of its intrinsic energy value, a trend that the marketplace indicates will continue into the 

future. It is also enticing the chemical industry to reenter the United States and 

build new chemical manufacturing facilities because they will have access to a 

super-competitive and plentiful feedstock, jump starting the job growth potential 

downstream of the wellhead 

What does this mean for Ohio? Since 1860, Ohio has produced over 8.5 trillion 

cubic feet of natural gas and 1.14 billion barrels of crude oil. During recent history, 

the state’s proven reserves have fluctuated annually at 40–50 million barrels of oil 

and 800 Bcf to1 trillion cubic feet of natural gas. Each year those reserves have produced approximately 5 million barrels of crude oil and 85 billion cubic feet of natural gas, operated by a small but vibrant production industry that has supported 

approximately 12,900 direct and allied jobs. 

During 2009 through 2010, intense interest in the Utica Shale began to ramp up. 

This has led to a state-wide lease play and exploratory drilling. The State’s Geologist recently provided a volumetric calculation to estimate the recoverable reserve 

30 

1Shale Formations and Their Potential; Larry Wickstrom, R. A. Riley, M. T. Baranoski, C.J. 

Perry, and M.S. Erenpreiss; Ohio Department of Natural Resources, Division of Geological Survey; October 2011, www.OhioGeology.com 2Ohio’s Natural Gas and Crude Oil Exploration and Production Industry and the Emerging 

Utica Gas Formation, Economic Impact Study; Kleinhenz & Associates, Ohio Oil and Gas Energy Education Program; September 2011 www.oogeep.org 

potential of the Utica Shale/Point Pleasant interval.1 He reported that should producers, using new technologies, extract 5 percent of the oil and gas in place, leaving 

95 percent of the resource in the rock, the Utica would generate 15.7 trillion cubic 

feet of natural gas and 5.5 billion barrels of crude oil. That is an astonishing number and an enormous, perhaps ‘‘once in a lifetime’’, opportunity for Ohio. 

On September 20, 2011 the Ohio Oil and Gas Energy Education Program released 

a study they had commissioned describing the economic impact of the existing Ohio 

exploration and production industry and the impact the resource shale play will 

have on Ohio.2 The study was based on similar development in the neighboring 

Marcellus Shale play. In regard to Utica Shale development the study concluded the 

following: • Ohio’s natural gas and crude oil industry’s will reinvest approximately $246 

million on new exploration and development in 2011, and is estimated to 

ramp up to $14 billion by 2015. Over the next five years, oil and gas producers are projected to reinvest over $34 billion in exploration and development, midstream, royalty and lease expenditures. • Ohio’s natural gas and crude oil industry, via its expenditures, could generate 

approximately $12.3 billion to the gross state product and have a statewide 

output or sales of $23 billion. • Ohio’s natural gas and crude oil operators (producers) could distribute more 

than $1.6 billion in royalty payments to local landowners, schools, businesses 

and communities based on an estimate of 2,837 new Utica wells drilled and 

completed (in production) between 2011 and 2015. This could exceed the total 

amount of royalties paid for all geological formations between 2000 and 2010. • Between 2011 and 2015, Ohio’s natural gas and crude oil industry will help 

create and support more than 204,520 jobs due to the leasing, royalties, exploration, drilling, production and pipeline construction activities for the 

Utica Shale within Ohio. Industry wages are projected to grow to more than 

$12 billion in annual salaries and personal income to Ohioans by 2015. 

Coupled with the readily available and affordable energy resource, the expansion 

of job growth suggests that development of the Utica Shale may be the most significant positive economic event to take place in Ohio for decades to come. 

Regulatory Policy: The principal regulatory authorities managing the environmental risks associated with oil and natural gas production are state agencies acting under state law or as the delegated regulator under federal law. To put the regulatory process in context, it is useful to understand some key elements of developing a well and generating production. 

Except on federally owned resources, the regulatory responsibility rests with the 

state oil and natural gas agencies for permitting well construction and completion. 

These agencies set the standards that must be met in drilling a well such as location limits, construction standards (including steel casing and cementing requirements) and surface management requirements. Well construction requirements are 

particularly significant because they are the principal methods of protecting against 

ground water contamination. By creating a barrier between ground water and the 

wellbore, oil and other chemicals from the well cannot move into water formations— 

and water cannot move into the wellbore. This technological approach has been used 

effectively for 75 years and is continually improved. Well completion regulations determine the management of technologies to stimulate production from oil and natural gas containing formations. Hydraulic fracturing is a well stimulation technology. Consequently, since its invention in the late 1940’s, its use has been regulated by state oil and natural gas agencies. Throughout the past six decades this 

regulatory structure has effectively protected against the environmental risks of 

fracturing without the involvement or intervention of the federal government. Proposals that the federal government needs to insert itself into well construction and 

completion regulation fail to show that any justification exists suggesting a failure 

of the current state based regulatory system or that the federal government has either the expertise or the capacity to regulate the 35,000 or more wells drilled annually in the United States. 

In fact, where the federal government does have regulatory authority related to 

oil and natural gas production, it relies on the state regulators to conduct the daily 

regulation efforts. Federal environmental laws apply to oil and natural gas producVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
31 

3Technical Program Overview: Underground Injection Control Program; United States Environmental Protection Agency; Office of Water 4606 EPA 816–R–02–025; revised July 2001 

tion activities when waste is generated. Most specifically with regard to the development of emerging shale gas and shale oil formations, the applicable federal laws address the disposal of produced water (including hydraulic fracturing flowback 

water)—the Safe Drinking Water Act and the Clean Water Act (CWA). The applicability of the law depends on the disposition of the produced water. Produced water 

injected underground is regulated under the SDWA; produced water discharged to 

the surface is regulated under the CWA. The SDWA and the CWA operate similarly. 

The federal government creates a national framework but the laws rely on state regulators to bear the larger permitting burden through the delegation of that role 

from the Environmental Protection Agency (U.S. EPA). 

With respect to the SDWA, regulation of underground injection is defined by the 

Underground Injection Control (UIC) program. The UIC program creates a series 

of Classes for different types of injection wells; Class II applies to oil and natural 

gas production. In 1980, Congress modified the SDWA to allow for primacy under 

the law to be granted to states for Class II programs based on equivalent effectiveness rather than adoption of the specific EPA regulations. Most oil and natural gas 

producing states with active underground injection operations have primacy based 

on equivalency with or more stringent than the federal program. Class II wells can 

either be used for disposition of water or for reinjection into formations as a type 

of secondary recovery to increase production. Only water produced from oil and gas 

wells can be injected into a Class II well. Nothing else. And, if something was, that 

would be a violation of the federal SDWA and Resource Conservation and Recovery 

Act (RCRA). 

According to EPA, the use of injection wells was documented as early as 300 A.D. 

and large-scale commercial use of injection wells in the U.S. began in the 1930s. 

The oil and gas industry isn’t the only industry that has used injection wells as a 

safe and well-regulated disposal means. Other industrial sectors that rely on injection wells include: chemicals, manufacturing, food and agriculture, plastics and 

metal/steel. Ohio is home to 10 so-called Class I wells (industrial wastes) that accept 

concentrated high-toxicity wastes generated by industrial processes. Ohio hosts 58 

Class III disposal wells that accept fluids used to dissolve and extract minerals such 

as uranium, salt, copper, and sulfur. 

Today, there over 144,000 Class II UIC wells operating within the United States. 

On average, those wells accept more than 2 billion gallons of water per day that 

is associated with oil and natural gas development. Clearly, without the delegation 

of this program to the state regulatory bodies, the federal law would be virtually 

incapable of implementation. 

In 1983, U.S. EPA delegated primacy authority to Ohio to run the UIC program. 

As the host of the oil and gas regulatory program, the Ohio Department of Natural 

Resources received the authority to manage the Class II program. Under the primacy agreement the ODNR issues UIC permits for Class II wells, but U.S. EPA set 

the standards for construction, maintenance and continuous monitoring of the Class 

II wells. 3 The Ohio UIC program is regularly audited by U.S. EPA and has undergone peer reviews conducted by the Ground Water Protection Council. 

Except for a minor amount used by local governments for dust and ice control, 

it is the law of the State of Ohio that oil and gas related produced water must be 

disposed of using a Class II UIC well constructed to the federal standards. Industry 

has constructed a network of Class II wells along the breadth of eastern Ohio to 

service the needs of oil and gas producers who must comply with Ohio law. Currently there are 181 Class II injections wells operating in Ohio or 0.12 percent of 

nation’s total population of such wells. The Ohio wells accept about 1.03 million gallons of produced water per day, or less than 0.05 percent of the total nationwide 

volume 

Opponents of oil and gas development have stated that the industry is exempt 

from federal regulation. Again, this is an attempt to politicize the process. In regard 

to this, recall that the Safe Drinking Water Act sets standards for public water supplies including establishment of the Underground Injection Control Program, a process that has the specific purpose to permanently dispose by impoundment of a waste 

in an appropriate underground reservoir. 

Hydraulic fracturing is a well completion procedure designed to induce permeability in a low-perm oil and gas reservoir by creating a fracture—a pathway— 

through the targeted reservoir rock to more readily allow the oil and gas to move 

through the reservoir and into the wellbore to then be lifted to the surface. With 

few exceptions, it is a one-time procedure. It is never an ongoing procedure (like 

Class I or II injection). It is not the disposal of a waste stream. In fact, it is done 

32 

4 ‘‘State Oil and Gas Agency Groundwater Investigations and Their Role in Advancing Regulatory Reforms, 

A Two-State Review: Ohio and Texas’’, Scott Kell, Groundwater Protection Council, August 

2011, www.gwpc.org 

to make a well capable of production in order to efficiently withdraw in commercial 

quantities product from the rock, including the water that was used during the frac 

job. 

There have been anti-oil and gas organizations that have attempted to construct 

an argument that fracturing is the same thing as Class II injection of produced 

waters and should be regulated as such under SDWA. That argument is an attempt 

to fit a square peg in a round hole and it fails by virtue of the various definitions 

of the processes being discussed. 

Congress never had the intention of regulating a well stimulation process under 

the SDWA as a waste disposal process. In 2005 Congress clarified that view by stating very simply in the 2005 Energy Policy Act that hydraulic fracturing—or storage 

gas injection for that matter—is not underground injection. Congress did not exempt 

the industry from the SDWA as others claim. In fact, industry’s produced waters 

waste streams are specifically regulated as Class II injection and fully covered 

under SDWA federal regulation. There is no ‘‘loophole’’. The language is definitional 

and straight forward. Nowhere does it say that the oil and gas industry and its activities that are relevant to the Act are exempted from SDWA regulation. 

Corroboration of State-Based Regulation: The operation of oil and natural 

gas wells has been regulated since the 1920’s with an increasing emphasis on environmental controls since the 1960’s. This regulation has been and continues to be 

done effectively by the states—a reality that has been recognized by the Congress 

and by the EPA. Because of the diversity of conditions associated with oil and natural gas production, the regulatory process must be flexible and reflect the unique 

conditions in a state or areas within a state. It requires the technical expertise that 

has been developed in each state and which does not exist within the EPA. For this 

reason federal law has generally deferred to the states for the regulation of this industry. 

GWPC: The Ground Water Protection Council (GWPC) is an organization of state 

ground water regulatory agencies which come together to mutually work toward the 

protection of the nation’s ground water supplies. The purpose of the GWPC is to promote and ensure the use of best management practices and fair but effective laws 

regarding comprehensive ground water protection. 

During August 2011, the GWPC issued a report that investigated the regulatory 

history of Texas and Ohio as it relates to oil and gas production and protection of 

groundwater resources.4 The report conclusively demonstrates that the state regulatory agencies within these states, both significant oil and gas producing states, 

have prioritized regulatory reforms and strategically applied resources to improve 

standards that reduce risk associated with state-specific compliance issues. Over 

time, both Ohio and Texas have strategically enhanced regulatory standards for 

state-specific oil and gas E&P activities that have been found to cause groundwater 

contamination incidents. In other words, the states have made consistent ongoing 

improvements to protect the environment and the public interest that is tailored to 

each individual state’s characteristics and needs. 

STRONGER: Over time the states have engaged in a process that corroborates 

their regulatory abilities, identifies regulatory gaps and provides a process to close 

those gaps and improve their respective regulatory programs. The State Review of 

Oil and Natural Gas Environmental Regulation, Inc. (STRONGER) is an independent stakeholder governing body that manages the state review process. 

The overall objective of the State Review Process is to help state oil and gas regulatory programs improve. The key innovative aspects of the State Review Process 

are the teams made up of equal representation from the environmental community, 

state regulators, and industry that come together to conduct an authentic peer review critique of a state’s regulatory program, benchmarking the program against a 

national set of guidelines that itemize the critical elements necessary to protect the 

public interest and environment. 

This process represents a stakeholder-driven collaborative effort working together 

to develop a regulatory framework at the state level that effectively protects the environment while recognizing the unique historic, geologic, and topographic characteristics of oil and gas development among the states. 

STRONGER recently updated the review guidelines to include a specific section 

focusing on hydraulic fracturing. Over the past year STRONGER has done frac-specific review in six states. In Ohio, following implementation of new law (Senate Bill 

33 

5Secretary of Energy Advisory Board, Shale Gas Production Subcommittee, 90–Day Report; 

SEAB, August 18, 2011, http://www.shalegas.energy.gov/ 6Prudent Development: Realizing the Potential of Abundant North American Natural Gas and 

Oil Resources, National Petroleum Council, September 15, 2011, http://www.npc.org/ 

165), STRONGER conducted a state review specific to hydraulic fracturing. The review concluded that the Ohio program was overall well managed, professional and 

meeting its program objectives. 

The Secretary of Energy (USDOE), Advisory Board (SEAB), Shale Gas Production 

Subcommittee interim reports 5 and the recent National Petroleum Report on Shale 

Gas 6 have specifically commended the State Review Process. 

The State Review Process demonstrates that the states are the best and most efficient point to regulate the industry’s waste streams. The process provides for a system of constant improvement and an opportunity to share and promote new or 

unique regulatory concepts among the states, while maintaining the flexibility needed to meet individual states’ needs. 

Department of the Interior and Federal Lands: The Department of the Interior has recently indicated it is in the process of developing regulations for the use 

of hydraulic fracturing on federal lands and tribal lands in trust. Historically and 

effectively, states have been the primary regulator for well construction and stimulation techniques like hydraulic fracturing, and for good reason which I’ve outlined 

in detail. While the proposed regulations have not been formally noticed, I understand a draft proposal was sent to the Office of Management and Budget for initial 

review and separately a draft was released to the press providing a first glance at 

what the Department is considering. Upon review, it is apparent these draft regulations will add significant costs and burdens to companies operating on federal lands 

without any appreciable improvement in environmental protection. 

Over the last several years, new rules, policies and administrative actions have 

made it more difficult for oil and natural gas producers to operate on federal and 

tribal lands. In fact, the American Petroleum Institute (API) recently issued a report 

that for Bureau of Land Management (BLM) lands new oil and natural gas leases 

were down 44 percent in 2009/2010 compared with the previous year. In addition, 

the study also found that permits and new wells drilled on federal lands were also 

down by roughly 39 percent over the previous year. This loss of production not only 

impacts the federal treasury, but it also hurts businesses and local communities 

throughout the region that rely on ‘‘multiple use’’ of federal lands as the backbone 

of their economy. The Wayne National Forest located in southeastern Ohio is a good 

example of this. 

The draft BLM regulations proposed for hydraulic fracturing are more burdensome than those any western state has already implemented. By requiring a 30 day 

pre-job approval and forcing operators to submit a separate application for their hydraulic fracturing operations, the BLM has established a system that is doomed to 

fail. The 30 day clock is also unrealistic and does not recognize the realities of a 

hydraulic fracturing job as it is being completed. In addition, the draft regulations 

raise a host of questions regarding what will be required for operators to remain 

in compliance with the regulations. 

The proposed regulations to govern hydraulic fracturing on federal lands are redundant to what states are already doing to manage any environmental risk, and 

doing well according to EPA Administrator Lisa Jackson, and will only further delay 

an already slow approval process for oil and gas operations. At a time when our nation is looking for ways to increase job creation and economic activity, the proposed 

regulations will take us further from that goal and will instead create further hardship for oil and gas producers and the mineral owners—American taxpayers—who 

desire those revenues and economic activity. 

Tom Stewart serves as the executive vice president of the Ohio Oil and Gas Association (OOGA), having been elected to that position in September 1991. At 

OOGA, Stewart is director of staff; editor of the Association’s publications; an industry spokesman to media outlets and other forums; and, on behalf of OOGA members’ 

interests, serves as public policy advocate in Columbus and Washington D.C. 

Stewart serves as the Ohio associate representative to the Interstate Oil and Natural Gas Compact Commission (IOGCC), having been appointed to that position by 

Governor George Voinovich in 1997. IOGCC (http://www.iogcc.state.ok.us/) is an organization of governors of the oil and natural gas producing states established to 

promote the conservation and efficient recovery of domestic oil and natural gas resources while protecting health, safety and the environment. 

34 

Stewart is an active participant with the Independent Petroleum Association of 

America (IPAA)(www.ipaa.org) and serves on the IPAA Environment and Safety 

Committee, the Communications Steering Committee, the Gas Pipeline Safety SubCommittee and is an original member of the management team organizing the national BRIEF Project. http://www.energyindepth.org/ 

In December 2001, Stewart was elected to the Board of the State Review of Oil 

and Natural Gas Environmental Regulations, Inc. (STRONGER) as one of three representatives for the U.S. oil and gas exploration and production industry. During 

2003, Stewart served as chairman of the STRONGER Board. He currently serves 

as vice-chair of the organization. STRONGER is a non-profit organization created 

to administer and advance the state review process of the States’ oil and gas exploration and production waste management regulatory programs. STRONGER is a 

stakeholder-driven process with equal representation from government, industry 

and the environmental community. STRONGER’s objective is to foster constant improvements in state oil and gas regulatory programs in order to protect human 

health, safety and the environment. http://www.strongerinc.org/ 

From August 2002 to November 2005, Stewart served as the secretary treasurer 

of the Liaison Committee of Cooperating Oil and Gas Associations. The Liaison is 

a national network organization of state and regional trade associations that represent the independent oil and gas exploration and production industry in the 

United States. Stewart was responsible for coordinating the organization’s efforts. 

Prior to joining OOGA, Mr. Stewart has fifteen years of formal experience in the 

oil and gas industry as an oil and gas producer and provider of contract drilling 

services. He is the third generation of his family to engage in exploration, development and production of crude oil and natural gas. 

The Ohio Oil & Gas Association is a statewide trade association with over 

1,900 members who are actively involved in the exploration, development and production of crude oil and natural gas within the State of Ohio. Since 1947, the Association’s mission is to protect, promote, foster and advance the common interests of 

those engaged in all aspects of the Ohio crude oil and natural gas exploration and 

production industry. 

Mr. LAMBORN. OK. Thank you. 

[Disturbance in hearing room.] 

Mr. LAMBORN. I will ask you to respect everyone’s rights. 

[Disturbance in hearing room.] 

Mr. LAMBORN. Please try to respect everyone’s rights. 

[Disturbance in hearing room.] 

Mr. LAMBORN. Please respect everyone’s rights. 

[Disturbance in hearing room.] 

Mr. LAMBORN. This gentleman here in the blue. In the next row 

behind they were loud also. 

[Disturbance in hearing room.] 

Mr. LAMBORN. Please respect everyone’s rights. This lady here is 

disrupting also. 

[Disturbance in hearing room.] 

Mr. LAMBORN. Does anyone else want to leave or be disruptive? 

I would ask everyone to respect the people’s rights who are here, 

who are testifying, the diversity of views that will be testifying. 

Ms. PAPAI. Thank you. 

Mr. LAMBORN. I think they all deserve to be heard. So I would 

ask each member of the audience to respect the right of the witnesses and the rest of the public who are here that want to hear 

the witnesses. 

We will now continue with Mr. Taylor who represents Local 396. 

Mr. Taylor? 

35 

STATEMENT OF ROLAND BUTCH TAYLOR, BUSINESS 

MANAGER, PLUMBERS & PIPEFITTERS LOCAL 396 

Mr. TAYLOR. Thank you, Chairman Lamborn. Members of the 

Subcommittee on Energy and Mineral Resources, thank you for the 

opportunity to appear here today to discuss natural gas, America’s 

new energy and creation of jobs and growth in the community, especially in the Mahoning Valley. 

My testimony today here will focus on the economic recovery, not 

on my organization of the Plumbers and Pipefitters, but many organizations as well as businesses in the industry in and outside of 

shale. There have been numbers of opportunities and benefits from 

partnerships that have been formed. 

Road to economic recovery. As reported in the regional chambers, 

the economic engine of the Youngstown-Warren region known as 

the Mahoning Valley was revving up in recent years. Since 2008 

economic development project announcements have resulted of an 

impressive $1.5 billion investment. That is 5,098 new jobs, 7,840 either maintained or retained jobs. The shale industry development 

boom that is coming into Ohio is bringing industrial cities, such as 

Youngstown, Warren, Salem, East Liverpool, Wellsville and Steubenville back to life. These projects that our organization has been 

part of includes V&M Star, the leading producer of seamless mill 

and tubular goods for the oil and gas industry, has started construction in Youngstown in the new $650 million, 1 million square 

foot seamless tubular production mill. It has created over 1,500 

construction workers’ jobs and over 300 from my organization, 

United Association. In advance of that is 350 plant jobs in advanced manufacturing plus more phases are to come, such as a finishing mill, water treatment plant and many more. 

V&M Star’s sister company VAM-USA is a manufacturer of premium pipe connections used in the shale drilling process. This will 

consist of a 200,000-square foot finishing plant at a cost of $57 million and will employ 200 construction workers and over 100 new 

manufacturing jobs. 

Universal Stainless in North Jackson, Ohio, has a 200,000- 

square foot building with a cost of $100 million, manufacturing in 

aerospace and oil and gas production, and it also includes 200 construction workers, 100 new plant jobs. It was completed in 2010 

but still is adding on and expanding. 

Patriot Waters has built a state-of-the-art fracking water treatment facility in Warren, Ohio which created 43 jobs. More of these 

types of facilities are being built around the area. These are a 

small part of many of the projects that are developing in Mahoning 

Valley, like General Motors Lordstown, R.G. Steel, RTI Metals, as 

well as commercial growth in the hospitals and schools. For example, Youngstown State University has announced plans for a Natural Gas Water Resource Institute to better prepare its students 

for jobs related in Utica shale. Eastern Gateway Community College has remodeled two facilities in the Youngstown-Warren area 

for training in such positions within the building trades or jobs in 

the community. 

I would like to finish my economic recovery by talking about two 

companies that have relocated into the area and that Local 396 has 

agreements with for pipe fabrication and components in industrial 

36 

projects, and they do work both nationwide as well as outside this 

country. 

First is De-Cal Mechanical. It is a pipe corporation, pipe fabrication plant, and it has relocated a branch from Detroit, Michigan 

into the Youngstown, Ohio area. The Youngstown offices opened in 

2011 by purchasing a 16,000-square foot building near the V&M 

Star project. In less than 1 year, they are expanding their fab shop 

operations by 46,000 square feet and increasing their employment, 

employees, members of my local, from 40 to 130. This partnership 

was formed by both government, local and Federal, regional chambers, management as well as labor working close together to make 

this happen. 

Evets Oil and Gas, V.E.C. Incorporated, is a mechanical company 

that has been involved in Marcellus shale on the electrical side. 

The company has expanded to offer their turnkey operations to gas 

corporations and has worked nationwide, has 200 compressors 

built, $2 million fab shop in Girard, Ohio, and they have a strong 

reputation in quality work. 

I can see my time is getting close, so I am going to jump over 

to some of the things that are important in my statement. Natural 

gas holds in Ohio a very, very strong future in Local 396 both with 

its contractors and business. The manpower is so great we increased our apprenticeship program as well as our welder certifications. Our plan is to add more metal trades into the fab shop and 

helpers into the oil and gas. With this expansion, we have been 

able to recruit numbers of young people that are interested in this 

career, displaced workers and Veterans overseas. Part of the program is the VIP, which is known as UA Veterans In Piping. 

Our general president, Bill Hite, has started a partnership with 

the military, and with this there is 16 weeks accelerated class, 2 

weeks of transition into the civilian life. By this project alone there 

has been over a thousand military officers/military into the construction business. 

My closing is to thank Chairman Lamborn for the opportunity to 

provide this Subcommittee with the achievements and opportunities that Plumbers & Pipefitters have experienced. There have been 

a few elected officers/officials that have wanted to put a moratorium on this industry. I feel this would be a travesty, especially 

concerning the growth that we have experienced over the years, 

and the drilling process has not really started in Ohio. 

One of my members from Local 396 was asking how I am handling the headaches of the demands of the work picture. My reply 

to him was, ‘‘I would rather deal with the headaches than the 

heartaches that I have experienced over the last 2 years when 

there were no opportunities.’’ 

I welcome this Committee and very well appreciate it, much appreciate it for being able to appear in front of you. Again, I want 

to thank you. I skipped over a couple of things because I know my 

time was limited, but I wanted to thank you both, Congressman 

Bill Johnson and Tim Ryan, for their support, not only for opportunities to get grant money for our Veterans to get into this workplace, but also the symposium for the Utica shale in order to draw 

people to Ohio. Thank you. 

[The prepared statement of Mr. Taylor follows:] 

37 

Statement of Roland ‘‘Butch’’ Taylor, Jr., Business Manager, 

United Association of Plumbers & Pipefitters Local 396 

Chairman Lamborn and members of the subcommittee on Energy and Mineral 

Resources: Thank you for this opportunity to appear here today to discuss with you 

Natural gas—America’s new energy, and the creation of jobs and the growth of our 

community in the Mahoning Valley. My testimony today will focus on the economic 

recovery, not only in my organization of the Plumbers & Pipefitters, but other organizations, as well as all businesses in the industry and outside of the Shale industry. All have had numerous opportunities to benefit from the partnerships that have 

been formed. 

Road to Economic Recovery: 

As reported by the Regional Chamber, the economic engine of the YoungstownWarren region known as the Mahoning Valley has been ‘‘revved up’’ in recent years. 

Since 2008 economic development project announcements have resulted in an impressive $1.5 billion investments, 5,098 new jobs and 7,840 maintained/retained 

jobs. 

The Shale gas development boom that is coming into Ohio is bringing industrial 

cities in the region, such as Youngstown, Warren, Salem, East Liverpool, Wellsville, 

and Steubenville back to life. Projects that our organization have been part of include: 

1. V&M Star, the leading producer of seamless pipe and tubular goods in the oil 

and gas industry. They have started construction in Youngstown on a new 

$650 million, one-million square foot seamless tubular product mills. It has created over 1500 construction workers jobs (over 300 from the United Association) and 350 plant jobs in advanced manufacturing. Plus more phases are to 

come, such as a finishing mill, water treatment plant, and many more. 

2. V&M Star sister company VAM–USA, a manufacturer of premium pipe connections used in the Shale drilling process, will build a 200,000 square-foot finishing plant at a cost of $57 million and employing 200 construction workers, 

with over 100 new jobs in manufacturing. 

3. Universal Stainless in North Jackson, Ohio. A 200,000 square-foot building 

with a cost of $100 million dollars. Manufacturing in aerospace and oil and gas 

production. 200 construction workers, 100 new plant jobs. This was completed 

in 2010, it has since been added on to and expanding. 

4. Patriot Waters built a state-of-the-art fracking water treatment facility in the 

city of Warren, creating 43 jobs. Plus more of these types of facilities are to 

be built in the area. 

These are a small part of the many projects that are developing in the Mahoning 

Valley, like GM Lordstown, R.G. Steel, RTI Metals, as well as commercial growth 

in hospitals and schools. For example, Youngstown State University announced 

plans for a Natural Gas Water Resource Institute to better prepare its students for 

jobs related to Utica Shale. Also, Eastern Gateway Community College has remodeled two facilities in the Youngstown-Warren area for training into such positions 

as the Building Trades and jobs in the community. 

I would like to finish with Economic Recovery by talking about two companies 

who have relocated to our area, that Local Union 396 has Agreements with to fabricate pipe and components for Industrial projects nationwide and even outside the 

country. 

1. De-Cal is a mechanical contractor and pipe fabrication plant who relocated a 

branch office from Detroit, Michigan to Youngstown, Ohio. The Youngstown offices opened August 2011 by purchasing a 16,000 square foot building near the 

V&M Star Company and in less than one year plans to expand its fab shop 

operation by 46,000 square feet and increase their employees/our members 

from 40 to 130. This is a partnership of both government—local and federal, 

Regional Chamber, management and labor who work very closely to make this 

happen. 

2. Evets Oil and Gas, V.E.C., Inc. is a new company in the mechanical field, but 

has been involved with the Shale Industry under the electrical side. The company is expanding to offer turn-key opportunities. Work would expand in the 

gas compressor station. This company travels nationwide and has installed 

more than 200 compression stations and plans to build a 2 million dollar fab 

shop in Girard, Ohio. They have a strong reputation for quality work. 

Because of the gas industry and the VM Star project, our 52 signatory contractors, 

such as Roth Bros, Prout Boiler, Western Reserve Mechanical and McCarls, employ 

over 400 of our members, working in all facets such as the new shale oil, industrial, 

38 

light commercial and residential. Local Union 396 is very proud to support them 

and have a great labor-management relationship. 

Training: 

Natural gas holds promise for the future of Ohio and the future for Local Union 

396 signatory contractors and businesses in our area. The manpower needs will be 

so great that we have increased our apprenticeship program, as well as our welder 

certification programs. Our plans are to add to such support groups as Metal Trades 

so that they will be utilized into the Fab shops, and Helpers to be utilized into the 

oil and gas industry. Both Metal Trades and Helpers will be used in a pre-apprenticeship program for future students of the piping industry. This is where we can 

start recruiting individuals that are young students looking for a career, as well as 

displaced workers and veterans coming from overseas back into the workforce. 

By expanding our training programs, we are going to utilize some of the programs 

that have been set up for us by the United Association, such as the UA Veterans 

in Piping (VIP). Our General President of the United Association, Bill Hite, has created this program to include a partnership with the US military. The VIP Program 

provides retired vets with 16 weeks of accelerated welding training. But before that 

career-training begins, they kick-off the program with an additional two weeks of 

transitional training to help returning veterans adjust to civilian life. The training 

is free to veterans who are placed in construction careers nationwide. Over 1,000 

veterans are already on the job. General President Hite received distinguished service awards from the Military Officers Association of America. 

Another program we have enforced: Pathway through the Building Trades, Education and Opportunity to Employment. This will also seek out and address the minorities and women in well-paid jobs and careers, upgrading their skills in order to 

achieve their academic goals both in training and the apprenticeship programs in 

the building trades. 

We have been able to apply for grants in order to recruit welders, such as the 

downhill program. Our goal is that this program will expand into having proficient 

welders in the oil and gas industry. I would like to thank both Congressmen Bill 

Johnson and Tim Ryan for their support in this program. 

Our Local went from close to 40% unemployment two years ago, to full employment, with over 440 traveling members from the United Association from all over 

the country working in our jurisdiction at one time. And no lay-offs are in the future. 

Partnerships: 

The working relationships that we have in the Mahoning Valley are a big part 

of the success and the great opportunities that we have now. Our organization of 

Plumbers and Pipefitters Local 396 works very closely with the Regional Chamber 

and the Columbiana County/Wellsville Chamber, so close in fact that labor leaders 

from the Building Trades have a position on the Board of Directors at the Chamber. 

We have worked to build a positive relationship with bipartisan elected officials in 

order to build trust and work together as a team, with one goal: to improve the community that we live in. 

With the support of both Congressman Bill Johnson and Tim Ryan, we have put 

together a Symposium Meeting for the oil and gas industry (Utica Shale Drilling). 

It will bring together companies of the oil and gas industry, piping contractors that 

have true expertise in their fields, Tech Belt/Energy companies, Community Colleges, and State Colleges. Businesses that are affiliated, the Regional Chamber of 

Commerce, and Labor, including Local 396, will work together to play a key role 

in the Shale development. 

In closing, thank you, Chairman Lamborn, for the opportunity to provide the subcommittee with the achievements and opportunities that Plumbers & Pipefitters 

Local 396 have experienced. There have been a few elected officials wanting to place 

a moratorium on this industry. I feel that this would be a travesty, especially considering the growth that we have experienced already, and the drilling process has 

not even started yet. I have had a member of Local 396 ask me how I am handling 

the headaches of all the demands with the work picture. My reply to him was, I 

would rather handle the headaches than the heartaches that we have experienced 

these past few years, when there were no opportunities. Again I would like to thank 

the committee for my appearance here. It has been overwhelming and much appreciated. If there are any questions I would be pleased to take them at this time. 

Mr. LAMBORN. Thank you, Mr. Taylor, so much. 

Mr. Pounds? 

39 

STATEMENT OF JACK POUNDS, PRESIDENT, 

OHIO CHEMISTRY TECHNOLOGY COUNCIL 

Mr. POUNDS. Thank you, Mr. Chairman, Members of the Subcommittee. 

I am Jack Pounds. I am President of the Ohio Chemistry Technology Council. We are a trade association for the chemical industry in Ohio which has historically been really the foundation for 

the major part of manufacturing activities in the state. The value 

of chemicals produced in Ohio each year is approximately $28 billion, and about 20 percent of that is sold to customers outside of 

the United States. So we are an important player in the global 

economy. 

Unfortunately the chemical industry in Ohio and in the United 

States as a whole has been in a state of slow to no growth for much 

of the past decade. This reflects really two things: First, the recession or near-recession conditions in the largest markets for products of chemistry and, second, the advantage that chemical companies outside the United States have over our companies here in 

terms of feedstock costs and energy costs. 

The basic feedstocks that are purchased and further processed by 

the chemical industry around the world are primarily derived either from oil or from natural gas. In the United States, unlike Europe, the chemical industry feedstocks primarily come from natural 

gas. About 80 percent of them in the United States are from natural gas. 

In recent years natural gas prices have fluctuated dramatically as you well know, rising from under $2 per million British Thermal 

Unit back in the late 1990s to over $13 per million BTUs in the 

early to mid-2000s, and they continue to be very volatile. Yes, they 

are down today, but it is still a very volatile commodity. 

For our chemical companies in Ohio, unpredictable natural gas 

supply and pricing coupled with recession in the major markets for 

our chemicals have stifled new investment and job creation in an 

industry that is the foundation for almost all manufacturing. That 

is a technology resource that is vital to our country for its longterm viability and our national security. 

I should also note that purchased energy costs are an important 

consideration to our chemical industry. We are a major energy 

user, and right now in Ohio, as you well know, more than 80 percent of our electricity is generated from coal. That resource is in 

question and at some point, natural gas may be the resource that 

has to take its place. As recently as two years ago, no one in our 

industry in Ohio saw any magic bullet solution to the dual challenges that our industry faced of high and unpredictable costs of 

raw materials and the same with purchased electricity. 

Now with the emergence of Ohio’s vast shale gas reserves onto 

the scene, it is my belief that Ohio’s chemical industry is about to 

experience a renaissance. I say this because sensible, responsible 

development of the shales will make Ohio’s chemical industry competitive with companies in any region in the world except Saudi 

Arabia and Canada. 

That is because the shale gas can provide, first, lower feedstock 

costs that our chemical companies will use those feedstocks to create innovative high technology content products for sophisticated 

40 

customers around the world, and second, a long-term supply of natural gas that can fuel utility boilers that generate low cost electricity. 

The feedstock benefit reflects the fact that much of Ohio’s shale 

formations contain high levels of wet gases which are fractioned, 

such as ethane, butane and propane. These fractions are the critical feedstocks for the chemical industry today, and when they are 

processed through a fracking facility will yield basic chemicals, 

most importantly ethylene from methane. 

If I could refer the Committee to the chart that we have here, 

in the upper left-hand corner it shows how we start the ethylene 

chain. And ethylene is really the most critical chemical raw material. You have the natural gas well, the wet gas fraction. Ethane 

is separated from that at the central fracking facility. We soon 

hope to have one of those located in this region. And then from the 

fracker it goes to the other chemical plants, and those chemical 

plants will make things like polyvinyl chloride, vinyl chloride, 

ethylene glycol, styrene, polyethylene, polypropylene, and those are 

the materials that really then are sold to other companies. 

We have about 2,500 companies in the plastics and polymers industries in Ohio that take those materials and make every sort of 

consumer, medical device that you can imagine, lots of coatings for 

appliances, cars, that sort of thing, and those things are sold to 

customers around the world. So Ohio is a huge player in that marketplace in the world today. This is going to position our chemical 

industry to provide basic feedstocks to so many other different industries. 

Last year the American Chemistry Council Economics Division 

published an economic study, which the Committee has in its possession, that concludes that a new cracker facility in this region 

with the capacity to create 1 million metric tons of ethylene from 

ethane each year could trigger construction of new chemical production facilities in Ohio that would add $4.8 billion in additional 

chemical production value, about 17 percent increase in the production from chemicals in Ohio; would lead to the direct, indirect and 

induced creation of 17,000 new jobs, $600 million in new payrolls; 

and provide our existing 2,500 polymers/plastics businesses in the 

state with a reliable, competitive and close-by supply of the ethylene derivatives that they use in their business. 

Mr. Chairman, as a native of this part of the state, it would seem 

our young people generation after generation move away to find opportunities to make a life for themselves elsewhere. I have a strong 

personal interest in seeing things change here. The opportunities 

for Ohioans to benefit from sensible development of our shale resources represents a once in a lifetime opportunity. I would urge 

the Congress to look upon this as an exciting first step in making 

our state, this part of the state and our people here players in the 

global economy with a standard of living that benefits a people that 

deserve it, who have a great work ethic here. 

I thank you again for the opportunity to be here this morning. 

[The prepared statement of Mr. Pounds follows:] 

41 

Statement of Jack R. Pounds, President, 

Ohio Chemistry Technology Council 

Good morning, Mr. Chairman: 

My name is Jack Pounds, and I am president of the Ohio Chemistry Technology 

Council, the non-profit association for the chemical industry in the state of Ohio. 

The chemical industry in Ohio has always been a major part of the manufacturingbased economy of the state. Our chemical companies are engaged in the research, 

development, and production of highly-sophisticated chemistries that are sold to customers around the world who use them as the basic building blocks for the thousands of products that make our modern lifestyles possible. The value of chemicals 

produced in Ohio is more than $28 billion annually, with approximately 20% of 

those representing sales to customers outside the United States. 

Unfortunately, the chemical industry in Ohio—and in the United States as a 

whole—has been in a state of slow to no growth for much of the past decade. This 

reflects (1) recession or near-recession conditions in the largest markets for the 

products of chemistry, most notably the auto, construction, and manufacturing sectors of the economy; and (2) the advantage chemical companies outside the U.S. 

have in terms of feed stock and energy costs. 

While tax and regulatory policies in this country have also played a role in the 

industry’s decline, the most significant factor has been the unpredictability in the 

costs of chemical feed stocks and purchased energy. 

Feedstock Costs: 

The basic feed stocks that are purchased and further processed by the chemical 

industry around the world are primarily derived from oil and natural gas. In the 

United States, more than 80% of the chemical industry’s feed stocks come from natural gas. In recent years, natural gas prices have fluctuated dramatically—reaching 

over $13 per million British Thermal Units (BTUs) in the early to mid-2000s, and 

continues to be very volatile. For our chemical companies in Ohio, unpredictable 

natural gas supply and pricing—coupled with recession in major markets for chemicals—have stifled new investment and job creation in an industry that is the foundation for almost all manufacturing in the U.S. and that is a technology resource 

that is vital to our long-term economic viability and national security. 

Purchased Energy: 

The chemical industry is a major energy user, and purchased electricity is a large 

component of production costs. The threat that coal may not be a long-term source 

of electric power in Ohio has loomed over the industry for many years, and has a 

definite impact on where new investments are located by major chemical companies. 

Ohio’s Shale Gas Represents a Potential ‘‘Renaissance’’ in Ohio’s Chemical 

Industry: 

As recently as two years ago, no one in our industry in Ohio saw any ‘‘magic bullet’’ solution to the dual challenges of high and unpredictable costs of raw materials 

and purchased electricity. 

Now, with the emergence of Ohio’s vast shale gas reserves onto the scene, it is 

my belief that Ohio’s chemical industry is about to experience a ‘‘renaissance’’. I say 

this because sensible, responsible development of the shales will make Ohio’s chemical industry competitive with companies in any region of the world—except for 

Saudi Arabia and Canada. That is because the shale gas can provide both (1)) lower 

cost feed stocks that our chemical companies will use to create innovative, hightechnology content products of chemistry for sophisticated customers around the 

world, and (2) a long-term supply of natural gas to fuel utility boilers to generate 

low-cost electricity. 

The feedstock benefit reflects that much of Ohio’s shale formations contain high 

levels of ‘‘wet gases’’, which are fractions such as ethane, butane, and propane. 

These fractions are the critical feed stocks for the chemical industry today—and 

when they are processed through a cracking facility, will yield basic chemicals, most 

importantly, ethylene from ethane. 

If I may refer to the chart here, a copy of which has been provided to the subcommittee, I can point out the route from a natural gas well to ethane collection 

to a cracker where ethylene is produced to other major chemicals and then to some 

examples of the thousands upon thousands of products that are critical to each of 

us. 

Last year, the American Chemistry Council’s Economics Division published an 

economic analysis (Shale Gas and Petrochemical Investments in Ohio—provided to 

the subcommittee) that concludes that a new cracker facility in this region with the 

42 

capacity to create 1 million metric tons of ethylene from ethane could trigger construction of new chemical production facilities in Ohio that would: 

• add $4.8 billion in additional chemical production (+17%); 

• lead to the direct, indirect, and induced creation of 17,000 new jobs in Ohio, 

$600 million in new payrolls, and $170 million in new tax revenues for Ohio 

governments; and, 

• provide our existing 2,500 polymers (plastics) businesses in the state with a 

reliable, competitive, and close by supply of the ethylene derivatives they use 

in their businesses. 

Mr. Chairman, as a native of this part of the state who has seen generation after 

generation of our young people move away to find opportunities to make a better 

life for themselves, I have a strong personal interest in seeing things change here. 

The opportunities for Ohioans to benefit from sensible development of our shale resources represent a once in a lifetime opportunity. I would urge the Congress to look 

upon this as an exciting first step in making our state, this part of the state, and 

our people players in the global economy, with a standard of living that befits a 

great people with a great work ethic. 

Thank you again for the opportunity to share my excitement with you. 


73226.001.eps
43 


73226.002.eps

/ '-, / Shale Gas & New Petrochemicals 

//./ , , I" Investment in Ohio 

... > \ " -1! Amcrlcan Chenw,t~y Council 

, - - July 2011 

This analysis is an addendum to the previous ACe analysis completed in March 2011, titled Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs, and US Manufacturing. That report presented the results of an analysis conducted to 

quantify the economic impact of the additional production of petrochemicals and downstream chemical products stimulated by an 

increase in ethane availability. This present analysis focuses on the benefits to the state of Ohio should a new petrochemicals complex be constructed in that state. It specifically examines the additional output, jobs and tax revenues generated from a private sector investment'ln petrochemicals. 

That Ohio could be the site of a new petrochemicals complex to take advantage of the lower feedstock costs arising from shale gas is 

obvious. Ohio features the seventh largest state chemical industry in the United States, with revenues of over $28 billion and employing more than 42,000 people. Logistical and other significant infrastructure is present as well and the pipeline carrying NGLs 

from the Marcellus to Sarnia will pass through the northern tier of the state. The state features access to the Great lakes and major 

rail as well as excellent universities (Case Western Reserve University, University of Akron, Cleveland State University, Ohio State 

University, etc.) with strong chemistry, materials science, polymer science, and chemicals engineering departments. Ohio also has 

considerable shale gas deposits. Furthermore, Ohio is within 500 miles of most of the US industrial base. 

Because petrochemical investment has shifted towards the Gulf Coast in recent decades, there is little excess petrochemicals capacity in Ohio that could be restarted to take advantage of shale gas developments. The analysis thus assumes the construction of 

"greenfield" facility, including a hypothetical 1.0 million metric ton per year world-class ethylene cracker as well as affiliated polyethylene and other downstream derivative plants. In addition to these battery limit process plants, investment for site development, 

utilities, logistics and other site-affiliated infrastructure is included. In total, such a petrochemicals complex would necessitate a $3.2 

billion investment. In addition, the renewed availability of these basic chemicals would also likely foster additional output of high 

value-added chemistry products as well. In the long-term, this would add $4.8 billion in additional chemical industry output. The 

IMPLAN model was employed to assess the direct, indirect and induced effects of petrochemicals investment in Ohio. It was found 

that the benefits to the Ohio economy would be manifold. 

The output and employment generated by additional ethane utilization in the petrochemical and derivative industries would be significant. The additional $4.8 billion in chemical industry activity would generate over 2,400 high-paying, desirable jobs in the Ohio 

chemical industry. Innovative, creative and pacesetting, the business of chemistry is one of the most knowledge-intensive industries 

in the manufacturing sector. 

Table 1: On-Going Economic Impact in Ohio from New Petrochemical Production in Ohio 

Payroll Output 

Impact Type Employment (SMiliion) ($ Billion) 

Direct Effect 2,453 $303 $4.8 

Indirect Effect 8,689 $525 $2.0 

Induced Effect 6,004 $234 $0.7 

Total Effect 17,146 $1,062 $7.5 

In addition, new petrochemical production in Ohio would generate purchases of raw materials, services, and other purchases 

throughout the supply chain 1

. Thus, an additional nearly 8,700 indirect jobs would be supported by the boost in ethane utilization in 

I While much of the supplies and materials are sourced from Ohio businesses, other purchases come from outside the state. Because this analysis 

focuses on the impact to the state of Ohio, those impacts are not considered. 

merkan Chemistry Council 

July2011 

© Amencan ChemiStry Councol. Inc 
44 

Mr. LAMBORN. OK. Thank you. 

We will know hear from Ms. Michelle Papai who sits on the city 

council of Athens, Ohio. 

STATEMENT OF MICHELE PAPAI, 

ATHENS CITY COUNCILPERSON, 3rd WARD, ATHENS, OHIO 

Ms. PAPAI. It is interesting to be on the other side of the light. 

Mr. LAMBORN. Are all your meetings as quiet as this one? 

Ms. PAPAI. Oh, I have lived in Athens, Ohio. 

[Laughter.] 

Ms. PAPAI. Chairman, Committee Members, thank you for inviting me to speak. 

My name is Michelle Papai, I am a member of Athens City Council. I am fully engaged with my constituency. In my day job I also 


73226.003.eps
45 

meet regularly with Southeastern Ohio residents from all socioeconomic backgrounds. I have witnessed a tremendous groundswell 

of community concern about shale drilling since dozens of formal 

protest letters were submitted to the Bureau of Land Management 

last fall requesting withdrawal of gas and oil lease sales in Wayne 

National Forest land. 

These included letters by the Mayor of Athens, Athens City 

Council, Athens County commissioners, water district heads and 

the President of Ohio University. President McDavis’ letter states, 

quote, ‘‘It is our duty to lead and support our campus and greater 

community as we seek safe living conditions, healthy economies 

and fertile land where we live and work. The potential December 

7, 2011 sale poses a threat to a healthy living and learning environment at Ohio University,’’ end quote. 

Athens City Mayor, Paul Wiehl, wrote, quote, ‘‘Our city’s water 

supplies, economy, safety and public health will all be severely 

harmed by the sales. We will not be able to fulfill our duty to protect our water supply if these sales go through,’’ unquote. 

Over 300 protest hard copy letters and 1,800 signed petitions and 

emails were sent to the Wayne. Our concerns are economic, environmental, ethical. They are about the threats to our quality of life 

and to the viability of our community. Athens City Council and 

county commissioners have passed resolutions expressing economic 

and environmental concerns. The commissioners call for stricter 

state and Federal Governmental regulations. Environmental impacts are documented daily in other parts of the country. Our city 

council resolution references the USEPA Pavilion Studies that document benzene at 50 times safe drinking water levels. Serious 

fracking contamination has been found endemic in Pennsylvania as 

well. 

Our aquifer on which 70,000 people depend for drinking water is 

shallow, permeable and inextricably linked to the health of the 

Hocking River. The Ohio Division of Natural Resources has not 

even mapped aquifers in our part of the state. How can we possibly 

proceed with deep shale drilling on the Wayne when this is the 

only source of water for most of the residents of Athens County as 

well as for many residents of adjacent Morgan County. 

The depth of our water table ranges from surface level to 20 feet. 

Our aquifer averages 60 feet below ground making it highly susceptible to surface or near surface contamination. Previous coal 

mining has left our land riddled with shafts. Drilling through these 

will provide pathways for gas and chemical migration and release 

acid water assuring corrosion of wells, casings and eventual well 

failure. 

Athens County is mostly rural and poor. Economic development 

is, of course, important to us, but so is the long-term sustainability 

of our county. Studies on current shale plays show that job growth 

comes to only about ten percent of industry production, and most 

jobs are temporary and go out of state. Our tourism, rural beauty, 

local food and arts industries, institutions of higher learning and 

green technologies are all incompatible with industrialization of 

our countryside and degraded area water. 

Two distinctive Athens County institutions, Ohio University and 

Hocking College, are central to our economy. Water and/or air conVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6602 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
46 

tamination would severely threaten them and, therefore, our region’s economy. What parent would want to send their child to an 

industrialized zone with highly polluted air and contaminated 

water? That is why students come to Ohio University from the 

North. 

We are concerned about property values, not only of leased land, 

but also nearby properties. Real estate agents have spoken with me 

about sales lost due to lack of buyer’s ability to protect their land. 

Insurance agents are receiving calls from homeowners discussing 

their property is unprotected because industrial operations nullify 

contracts. The FHA will not provide a mortgage for property with 

a drill site. Neither will HUD. These are devastating economic impacts that we fear will become widespread. 

Ohio’s Attorney General has stated his concerns about dishonest 

practices, inadequate regulation and chemical disclosure. Documented examples exist of landsmen in Athens County making false 

statements such as, quote, ‘‘Only fresh water,’’ unquote, is injected 

into their gas wells. 

I have spoken with many citizens who feel that they have leased 

under duress. They say, ‘‘I have a small amount of acreage, and 

they will take it anyway,’’ quote-unquote, or, quote, ‘‘my neighbors 

have signed, so I signed a nonsurface lease so I will have the resources to leave,’’ unquote. 

Other hard working taxpayers who have not signed have stated 

they will leave if drilling occurs on neighbor’s property because 

they will not tolerate resulting air pollution, potential water contamination, high levels of truck traffic, noise and light pollution. 

Ohio Representative Sutton isn’t here—Johnson and the rest of 

the Committee, as national leaders and policymakers, I urge you 

to make a stand now. These issues demand close scrutiny, rigorous 

regulation and a reasonable systemic approach. I ask that a full 

National Environmental Policy Act analysis be required at Bureau 

of Land Management’s request for hydraulic fracturing in the 

Wayne National Forest, Athens County, Ohio. 

Please hear the voice of the people that elected you and help us. 

There is too much at risk for our Appalachian communities. We 

must take the safest paths possible. As a local official my hands 

are tied with the State of Ohio. They have the control. ODNR has 

all the control. 

Thank you. 

[The prepared statement of Ms. Papai follows:] 

Statement of Michele M. Papa, Athens City Councilperson, 3rd Ward 

Committee Members, thank you for allowing me to speak today. 

I am here as an elected official for the City of Athens, located in Athens, Ohio 

and home to the main campus of Ohio University. Our city’s population is about 

24,000 with university enrollment of about 20,000. The county of Athens has a population of about 65,000 with 506 sq. miles. Almost 78% of that area is forested. 

You may be wondering, why am I speaking today? In October, our community 

quickly rallied and responded to the notification of pending lease sales of over 3200 

acres of Wayne National Forest land for gas and oil drilling, which could include 

deep shale drilling and high volume horizontal hydraulic fracturing. The Athens 

City Council sent a formal letter asking that the BLM halt the sales, stating, ‘‘Athens City Council, Athens City, Ohio is a statutory city that relies upon a riparian 

aquifer as the sole source for its municipal water system. . .We are concerned that 

the leasing, drilling, and operation of the potential wells in the Utica Shale will 

have a deleterious effect on our sole source municipal water supply. It must be 

47 

1 EPA/600/D–11/001/Feb 2011water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/ 

index.cfm 19–24 

noted that we have a meager water supply in general in unglaciated Ohio, and our 

water source is inextricably bound to the health of the Hocking River (http:// 

ohioline.osu.edu/aex-fact/0480_05.html). We are also concerned that the leasing and 

drilling of these parcels could negatively impact wildlife, habitat, and human health 

and recreational enjoyment.’’ The letter concludes, ‘‘We request the withdrawal of 

the lease sale until the proper environmental analysis is conducted and our water 

supply is protected.’’ 

The BLM also received letters from the President of Ohio University, Athens 

County Commissioners, Burr Oak Regional Water District, Athens City Wellhead 

Protection Team, the Athens City administration, and 42 other official bodies and 

individuals (blm.gov/es/st/en/prog/minerals/protests_information.html), a record 

number, indicating the level of concern and the severity of the threat to our water 

supply, economic and public health, and quality of life,. 

Athens City administration’s letter states, 

The City of Athens is filing this action because our city’s sole source riparian aquifer drinking water supplies will be severely impacted by these sales 

and because it is our duty by law to protect our drinking water supply. We 

are concerned that the stipulations in your lease do not protect the Hocking 

River and the aquifer, on which our City’s water supply depend. 

The City of Athens has an interest in these sales because our city’s water 

supply, economy, safety, and public health will all be severely harmed by 

the sales. We will not be able to fulfill our duty to protect our water supply 

if these sales go through. 

Athens Drinking Water Supply will be severely threatened by this sale 

The City of Athens drinking water supply is a sole source aquifer continuous with the aquifer under and nearby—downhill and downstream of—the 

Wayne parcels to be sold. It is also adjacent to and recharged by the Hocking River, which will be deleteriously impacted by these sales. 

The water table in our well fields ranges from surface level to 20’ below the 

surface throughout the year. The aquifer that feeds Athens’ water supply 

is shallow, averaging a maximum of 60 feet below ground level. It is therefore especially susceptible to pollution from surface level and near-surface 

level contamination. 

AWater withdrawals will threaten our water supply 

According to the Atlas of Reported Withdrawals by County for Athens 

County, Ohio, the county’s public water systems already use 99% of total 

withdrawals for public use daily. 

Athens City currently draws close to 5 million gallons a day, which is sometimes close to the capacity of the aquifer to recharge. Diminished water in 

the river has historically resulted in diminished availability in city wells. 

The city is already withdrawing close to the total water available per day 

on many days of the year. 

Significant water withdrawals from the aquifer and/or from the Hocking 

River are expected to occur and are currently allowed by Ohio law for deep 

shale horizontal hydraulic fracturing. According to the USEPA, each 

Marcellus well requires 2–10 million gallons of water per well (Kargbo et 

al., Natural Gas Plays in the Marcellus Shale, Environ. Sci. Technol., 2010, 

44 (15), pp 5679–5684). Utica wells, often twice as deep, generally require 

greater volumes than do Marcellus wells. 

AToxic chemicals used in drilling, fracking, and production will threaten 

our water supply 

Many hundreds of highly toxic chemicals are injected into wells for deep 

shale drilling and horizontal fracturing, including known carcinogens and 

neurotoxins, at rates of tens of thousands of gallons per well.1 Flowback 

water and sludge contain high levels of toxic chemicals, according to EPA 

documents published by the New York Times: ‘‘Diesel is not the only component of fracturing fluid that contains high levels of BTEX and other toxic 

materials. Indeed, companies have disclosed to the authorities in NY and 

PA that they use other types of petroleum distillates that contain high levels of benzene, a human carcinogen that is considered unsafe in drinking 

water at levels above five parts per billion, the equivalent of a few drops 

48 

2nytimes.com/interactive/2011/02/27/us/natural-gas-documents-1.html#document/p391/a9939 

3nytimes.com/interactive/2011/02/27/us/natural-gas-documents-1.html#document/p416/a9943 

4 op. cit. p. 646. 

5 scientificamerican.com/article.cfm?id=marcellus-shale-natural-gas-drilling-radioactive-wastewater 6upi.com/Science_News/2010/10/25/Tapping-natural-gas-could-unleash-uranium/UPI– 

62061288048109/ 7 op. cit. p. 644 ff. 

8 op. cit, multiple documents 

9 see for example NY Times,, op.cit., p. 1056 ff.; reuters.com/article/2011/04/20/us-chesapeakespill-idUSTRE73J6D820110420, newsworks.org/index.php/local/item/18791–02spfrack 10 Chakrabarty, Gargi. Commission Oks Record Fine for Natural Gas Seep, Rocky Mountain 

News, 8–18–04; Olsson Associates, West Divide Seep Area Second Quarter Monitoring Status 

Report for June 2011, Table 1 cogcc.state.co.us 11Stephen G. Osborn, et al., ‘‘Methane contamination of drinking water accompanying gaswell drilling and hydraulic fracturing,’’ PNAS, May 17, 2011, 108 (20), pp. 8172–8176 12 denverpost.com/breakingnews/ci_18880544, 9/12/11 

in a swimming pool. Some of these petroleum distillates that the industry 

uses include kerosene, mineral spirits, petroleum naphtha and Stoddard 

solvent. According to scientific literature, these additives can contain up to 

93 times the amount of benzene contained in diesel.’’ 2

EPA testing of brine in the Pennsylvania Brine Treatment—Franklin plant 

recorded benzene at 26 times federal drinking water standards.3

Because chemicals used by the gas and oil industry for drilling, fracturing, 

and production are exempted from regulation by the SDWA, Clean Water 

Act, and RCCRA, these levels are neither monitored nor reported. 

ARadioactivity will threaten our water supply 

Flowback waters and sludge can also contain high levels of radioactivity, 

according to documents submitted to New York State and Pennsylvania authorities. One Pa. report cites levels of radium 400 times the federal drinking water standard.4 New York State’s Department of Environmental Conservation analyzed 13 samples of wastewater brought thousands of feet to 

the surface from drilling and found levels of radium 226, a derivative of 

uranium, as high as 267 times the limit considered safe for discharge into 

the environment and thousands of times federal drinking water standards.5

University of Buffalo researchers report the tendency of high-pressure, 

high-volume injections to facilitate release of uranium into flowback water 

and to bind it to chemicals in the water.6

Athens authorities are particularly concerned because southeast Ohio’s 

deep shales are reported to have high levels of uranium, possibly especially 

in the deeper Utica shale. 

Our city’s water treatment facility can neither monitor nor adequately remediate these radioactive pollutants.’’ 

The report also states, ‘‘Deep shale drilling and horizontal fracturing spills, 

explosions, and leaks have caused high levels of radioactive and chemical 

pollution of waters. For example, the New York Times published a test 

sample taken Sept. 2, 2009 by the Pennsylvania Department of Environmental Protection of spilled drilling wastewater, which showed ‘‘radium levels of 6,540 pCi/L, or more than 1,000 times the drinking water standard.’’ 7

Numerous other reports by Pennsylvania authorities discuss large volumes 

of discharge into creeks,8 including a tributary of the Susquehanna that resulted in filing of a lawsuit against Chesapeake Energy by the State of 

Maryland.9

Below surface migration is widespread and well documented. A Colorado 

creek, contaminated by benzene from a deep underground migration of injected chemicals in 2004 which resulted in fines to Encana by the Colorado 

Oil and Gas Conservation Commission, still had high levels of benzene in 

groundwater monitoring wells sampled near the creek in mid-2011.10 The 

Proceedings of the National Academy of Sciences recently documented methane migration into drinking water supplies.11

The Denver Post reports that just three companies reported 350 spills since 

January 2010, including releases of benzene and other carcinogens three 

times in one month into surface waters in one county. 12

49 

13 Athens City formal protest letter, October 7, 2011, RE: Protest of the Bureau of Land Management’s Notice of Competitive Oil and Gas Lease Sale Concerning Parcels in Perry, Gallia, 

and Athens Counties, Ohio 

The City’s letter concludes that the sales will ‘‘irreparably impair the drinking 

water supplies and economy of the City of Athens, Ohio.’’ 13

Ohio University’s letter to the BLM, signed by Dr. Roderick McDavis, states; 

Statement of Reasons: It is our duty as an institution of higher education 

to lead and support our campus and greater community as we seek safe living conditions, healthy economies and fertile lands where we live and work. 

The potential December 7, 2011 sale of the publicly owned lands referenced 

above poses a threat to a healthy living and learning environment at Ohio 

University. 

Ohio University is currently unable to support a practice that is not strictly 

regulated and highly accountable. We request the withdrawal of the lease 

sale until a comprehensive, objective environmental and economic analysis 

is conducted and the absence of risk to our water supply, community 

health, and local economy can be assured. 

The city of Athens is located south and west of ‘‘The Wayne’’ as we locals call it. 

The Hocking River runs from the Northwest to the Southeast corners of the county 

where it empties into the Ohio River at Hockingport. The Hocking River and its aquifer is the origin of most of the counties drinking water. Our county uses several 

water systems due to prior contamination from coal mining and past gas extraction. 

Athens County has several Class II injection wells, and waste is delivered from out 

of state everyday. We have recently experienced serious water contamination from 

industrial processes. About eight years ago, it was determined that the chemical C– 

8 had been found in the water systems in the Eastern part of the county. A class 

action lawsuit was settled with Dupont, which had been releasing the chemical into 

the Ohio River for 30+ years. This county has suffered from the effects of resource 

extraction and chemical industrialization. Many of you may know that a few months 

ago a transfer gas pipeline exploded in Northern Athens County causing serious 

damage and destroying homes. 

As a resident of this county for 18 years, I have become very fond of the natural 

beauty, as have many others who travel to our area on a regular basis for tourist 

activity and for those who want to attend university in a beautiful non-urban setting. Prior to my election I was aware of hydraulic fracturing, but only from a distance. With ‘the Wayne issues’ and subsequent appearance of landmen feverishly 

signing up private landowners in the county, my knowledge base and understanding 

had to increase. In November I traveled to Golden, CO and received an earful from 

friends who have lived through the ‘gas boom’ there. In January, I traveled with 

nine other Athens county residents to Wetzel County, W. Va, to see hydraulic fracturing gas extraction first hand. Having grown up in industrial communities, I 

wasn’t shocked by the industrial character of the operation. The sheer scale of the 

operations, the drastic changes to the landscape, and the loss of farmers and rural 

landowners way of life was what shocked me the most. Listening to residents describe the changes to their lives was extremely difficult. Many thought they were 

helping their families. What they’ve since learned after 4 years of drilling is that 

they aren’t better off, and their way of life has changed drastically. The degradation 

of the landscape, changes in the topography, and loss of previously good water wells 

was significant. It was fortunate that we were able to see before and after photographs. I quickly began to think of ‘‘The Wayne’’ and other areas of Athens County 

were leases have been signed. The stories are not new to the members of this committee. They are the same no matter what community you travel to that has experienced this type of drilling. Some are better than others, but the changes are profound. 

The questions began to arise: Can this be process be carried out without making 

such a huge footprint to the land? How does a community handle the increased traffic, and toxic substances traveling on its roads? How do we protect our water and 

air from surface damage? What is happening thousands of feet below the surface? 

Can the method ever be safe? Even if fracking, ideally carried out can be perfectly 

safe, in practice mistakes happen, and corners are cut because of human error, and 

the consequences of such mistakes are potentially extremely serious and, in the case 

of aquifer contamination, irreversible and certain to destroy our entire community. 

Where will the vast amounts of water required come from? Our river? 

As a city councilperson looking into the Ohio Revised Code and municipality 

rights, one quickly learns that our protections are extremely limited. Where are the 

checks and balances? Oh yes, and where are the jobs? Community after community 

50 

14Digging Deeper into Job Claims, Keystone Research Center, June 2011 15 USEPA Proposed Rule, ‘‘oil and Natural Gas Sector: New Source Performance Standards 

and National Emission Standards for Hazardous Air Pollutants Reviews,’’ Federal Register/Vol. 

76, No. 163 at 52757, http://www.gpo.gov/fdsys/pkg/FR–2011–08–23/pdf/2011–19899.pdf 16nytimes.com/2011/02/27/us/27gas.html?_r=4&scp=5&sq=natural%20gas&st=cse 17 EPA/600/D–11/001/Feb 2011water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/ 

index.cfm 

reports insignificant increase in local employment. All the studies show less employment than what was initially promised. Property values decline, often drastically 

A recent Pennsylvania economic analysis states that reports of job growth from 

Marcellus activity are greatly overstated. Rather than the purported 48,000 jobs, 

‘‘Actual jobs data tell a different story. This briefing paper demonstrates that 

Marcellus Shale drilling has created no more than 10,000 jobs. . .The number of 

jobs created by Marcellus industries is small—less than 10%—compared to the 

111,400 increase in jobs in all state industries since Pennsylvania’s recent employment trough in February 2010.’’ The report concludes, ‘‘The modest contribution of 

the Marcellus Shale to job growth must also be balanced against the impact of drilling on other industries, such as tourism and the Pennsylvania hardwoods industry. 

It is also important to balance the contribution of the Marcellus Shale to job growth 

against the so-far unfunded environmental liability of the industry.’’ 14

Economic impact studies by researchers independent of industry, cited by economist Janette Barth (3/4/11), document the negative economic impacts of extractive 

industries historically and dispute the glowing picture painted by industry: 

‘‘Fossil Fuel Extraction as a County Economic Development Strategy: Are EnergyFocusing Counties Benefiting?’’, Headwaters Economics, September 2008. (http:/ 

headwaterseconomics.org) concluded that counties that were not focused on fossil 

fuel extraction experienced higher growth rates, more diverse economies, better-educated populations, a smaller gap between high and low income households, and 

more retirement and investment income. 

Another study, ‘‘Mining the Data: Analyzing the Economic Implications of Mining 

for Nonmetropolitan Regions’’ (W.R. Freudenberg and L. Wilson, Sociological Inquiry, 72, 4: 549–75), concluded that unemployment and poverty worsened in mining counties in non-metropolitan regions. It found that the highest levels of longterm poverty are in places where there was once a thriving extractive industry. 

Why doesn’t the industry disclose the contents of fracking waste? Perhaps this is 

the most disturbing feature of the entire undertaking—if the method is safe and established what possible justification could there be for excluding the industry from 

almost all of the federal laws that protect public health? 

Our community is very concerned about air emissions from this extractive industrial process. Our state laws barely regulate emissions, permitting virtually unrestricted open venting and flaring. Because the industry is exempted from aggregation standards of other industries, tons of volatile organic compounds will be emitted without reporting, let alone any restriction. U.S. EPA reports that hydraulic 

fracturing of one well creates approximately 23 tons of volatile organic compounds 

(VOCs) emissions, roughly 200 times more than if the well was not hydraulically 

fractured.15

The New York Times report on risks of deep-shale drilling and horizontal hydraulic fracturing documents air pollution issues: ‘‘Air pollution caused by natural-gas 

drilling is a growing threat. . .. Wyoming, for example, failed in 2009 to meet federal standards for air quality for the first time in its history partly because of the 

fumes containing benzene and toluene from roughly 27,000 wells, the vast majority 

drilled in the past five years. . .In Texas, which now has about 93,000 natural-gas 

wells, up from around 58,000 a dozen years ago, a hospital system in six counties 

with some of the heaviest drilling said in 2010 that it found a 25 percent asthma 

rate for young children, more than three times the state rate of about 7 percent.’’ 16

The USEPA 17 documents air emissions (p. 55): ‘‘One of the largest potential 

sources of air emissions from hydraulic fracturing operations is the off-gassing of 

methane from flowback before the well is put into production. The NYS dSGEIS 

[Draft Supplemental Generic Environmental Impact Statement] estimated that 

10,200 mcf of methane is off gassed per well.’’ The document reports up to 24,000 

mcf of methane released per well (Armendariz, 2009). ‘‘This gas is typically vented 

or flared, although reduced emissions completion methods can capture up to 90 percent of the gas. High concentrations of methane could also pose an explosion threat. 

On-site fuel tanks and impoundment pits containing flowback may also be sources 

of VOC and hydrogen sulfide emissions (ICF International, 2009a). The VOCs found 

51 

18 EPA/600/D–11/001/February 2011 19Theo Colborn, C. Kwiatkowski, K.Schultz, and M. Bachran, ‘‘Natural Gas Operations from 

a Public Health Perspective,’’ International Journal of Human and Ecological Risk Assessment, 

17(5) Sept 2011 20 56% of trees in the fluid application area were dead within two years. Mary Beth Adams, 

Land Application of Hydrofracturing Fluids Damages a Deciduous Forest Stand in West Virginia, J. Environ. Qual. 40:1340–1344 (2011) http://www.nrs.fs.fed.us/pubs/jrnl/2011/ 

nrs_2011_adams_001.pdf 21 Bamberger, M. and Oswald, R., ‘‘Impacts of gas drilling on human and animal health,’’ New 

Solutions, 22(1) 51–77, 2012, in press. 22 chec.pitt.edu/mediasite.cidde.pitt.edu/mediasite/SilverlightPlayer/Default.aspx?peid=689293c50f404f12b8c628b8f2285780, Dr. Simona L. Perry, Rennselaer PolyContinued 

in flowback may include acetone, benzene, ammonia, ethylbenzene, phenol, toluene, 

and methyl chloride (NYSDEC, 2009).’’ 

The EPA report continues, ‘‘Truck traffic is also a potential major source of air 

emissions.. . .the National Park Service estimated that total truck traffic of between 300 and 1,300 trucks per well would occur in the Marcellus Shale production 

areas. The NPS estimated that this could have a significant effect on regional nitrogen oxides levels (NPS, 2008).’’ USEPA also states, ‘‘Reports from Texas have linked 

pollutant emissions from natural gas drilling in the Barnett Shale to substantial reductions in air quality (Michaels et al., 2010). Additionally, areas of highly concentrated natural gas development in southwest Wyoming and eastern Utah have 

experienced episodes of degraded air quality (e.g., high levels of winter time ozone 

concentrations). Diesel engines used to run compressors, generators, drill rigs, and 

pumps may also create significant emissions.’’ 18

Theo Colborn and colleagues 19 state: ‘‘In addition to the land and water contamination issues, at each stage of production and delivery tons of toxic volatile compounds (VOCs), including BETX, other hydrocarbons, and fugitive natural gas 

(methane), can escape and mix with nitrogen oxides (NOx) from the exhaust of diesel-fueled, mobile, and stationary equipment, to produce ground-level ozone 

(CH2MHILL 2007; Colorado Department of Public Health and Environment 

[CDPHE] 2007; URS 2008; U.S. Congress, Office of Technology Assessment 1989). 

One highly reactive molecule of ground level ozone can burn the deep alveolar tissue 

in the lungs, causing it to age prematurely. Chronic exposure can lead to asthma 

and chronic obstructive pulmonary diseases (COPD), and is particularly damaging 

to children, active young adults who spend time outdoors, and the aged (Islam et 

al. 2007; Tager et al. 2005; Triche et al. 2006). Ozone combined with particulate 

matter less than 2.5 micrometers produces smog (haze) that has been demonstrated 

to be harmful to humans as measured by emergency room admissions during periods of elevation (Peng et al 2009). Gas field ozone has created a previously unrecognized air pollution problem in rural areas, similar to that found in large urban 

areas, and can spread up to 200 miles beyond the immediate region where gas is 

being produced (U.S. Congress, Office of Technology Assessment 1989; Roberts 

2008). Ozone not only causes irreversible damage to the lungs, it is similarly damaging to conifers, aspen, forage, alfalfa, and other crops commonly grown in the 

western U.S. (Booker et al. 2009; Reich 1987; U.S. Congress, Office of Technology 

Assessment 1989). Adding to this air pollution is the dust created by fleets of diesel 

trucks working around the clock hauling the constantly accumulating condensate 

and produced water to large waste facility evaporation pits on unpaved roads. 

Trucks are also used to haul the millions of gallons of water from the source to the 

well pad.’’ 

So again as an elected official, I ask: ‘‘what does our Athens Community gain’’? 

Increased tourism in the Wayne? Unlikely. Better hunting? Not likely if we look at 

the results of the West Virginia US Forest Service study on the effect of spilled 

fracking fluids on forests 20 or the new study on animal impacts 21. Congested roadways? I think of schools that are situated close to the National Forest. In Wetzel 

County, the school buses have to be escorted on narrow winding county roads when 

the industry is operating their vehicles, which is almost continuous. The associated 

infrastructure and building transfer lines through forests leave an extensive footprint. 

Reports from North Dakota and Pennsylvania on social impacts paint an ugly portrait of increased crime, including rapes and other assaults, suicides, people displaced from housing due to outrageous increased housing prices due to the influx 

of temporary workers, and other negative impacts on the quality of life. 

Dr. Simona Perry documents the social impacts of the so-called shale boom in 

Bradford County PA.22 She compares the impacts to the trauma of abusive relationVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
52 

technic Institute, ‘‘It’s like we’re losing our love’’: Bradford County social impacts from shale 

boom. 11/11 23http://ecowatch.org/2012/as-fracking-boom-hits-ohio-deceptive-industry-practices-squeezelandowners/provides links to an audio tape and transcript of a leasing session in which a 

Cunningham Energy representative states that only water is used in the drilling and fracturing 

process in addition to making other statements that conflict with the lease stipulations and industry practices. Recorded in Athens, Ohio, October 7, 2011. 

ships. Rapid transformation of landscape from rural, agricultural to industrial with 

greatly increased truck traffic and more dangerous and inconvenient travel as well 

as dust, diesel fumes, and noise are major sources of aggravation, stress and fear. 

The people she studied have experienced irreversible changes in connections they 

had with families’ history, childhood memories, land, and neighbors, as well as with 

present and future. The fear of losing land, health, and children’s future gave members of a focus group a ‘‘death’’ feeling. One member described it as a dread in the 

pit of her stomach. ‘‘It feels like we’re losing our love. The things we love the most 

may be taken away.’’ One resident described the situation as deception desecration, and denial. They talk repeatedly of broken hearts. Dr. Perry tells the story 

of a man arrested and incarcerated for 5 days and given a diagnosis of bipolar disorder as well as a bill for roadwork for hampering workers using his land as a staging ground. Dr. Perry uses the term, cycle of abuse, to describe the impacts of this 

industrialization on their community, lives, land, and loved ones. 

Athens County is a uniquely valuable region for its ecotourism, the presence of 

a major university, and a National Forest. Soon we will have the US Rt 33 corridor 

completed, which happens to go thru ‘‘the Wayne’’. What an ironic twist if all the 

careful environmental engineering that went into constructing the new highway 

goes to the wayside for hydraulic fracturing development. And even more, what a 

tragedy if our viable local economy and community with its vibrant tourism, arts, 

green technologies, and local and organic foods industries are destroyed in the rush 

to exploit our region for shale gas and oil. 

To come back to the risks to water: The risk of damaging and extracting vast 

amounts of water from our supply could be a game changer for this area. Will we 

become like Arizona where we have to have controlled use? Our area has gone 

through significant water cleanups from the coal tailings in our creeks and from underwater mine flooding. In Wetzel County, after the industry extracted water from 

the streams and local sources, they began to ship it in by tanker truck and also in 

pipelines that stretch for miles along the county roads as water is pumped from the 

Ohio River. Will this happen to the Hocking River? A salient discussion point: How 

is it that 5% of landowners, (a very generous estimate of landowners choosing to 

lease) can determine the course of public policy in Athens County? 

While one should not neglect the energy needs of the country and region, it is imperative to our region that we develop sources of energy that do not destroy our 

economy, health, and environment. And it is essential that these sources are developed on a level playing field, where dangerous forms of extraction are not encouraged by industry misinformation, government ties to industry, and shady deals. Already there have been evidence of unethical dealings on the part of landmen 23, and 

the Ohio Attorney General feels strongly that additional oversight is needed in the 

process of land leasing and in state and federal regulation of the industry. New laws 

are required to overturn such bizarre measures as the ‘‘Halliburton Loophole’’, and 

the companies that carry out hydraulic fracturing must be accountable for their impacts on communities. 

Our County Commissioners, Democrat and Republican, recently unanimously 

passed a resolution calling on the U.S. Congress to pass the FRAC Act, which would 

repeal the exemptions from the Safe Drinking Water Act and require disclosure of 

chemicals used in fracking. Additionally, the Commissioners’ resolution states, ‘‘We 

call upon the state of Ohio and the Ohio Department of Natural Resources to 

• Increase the number of state inspectors commensurate with the planned increase in drilling activities 

• Conduct geotechnical investigations of soil and rock stability prior to any 

drilling or surface impoundments such as dams or holding ponds 

• Require full disclosure of the chemical constituents used during deep shale 

drilling and hydraulic fracturing and the disposal methods for deep shale 

drilling and hydraulic fracturing waste 

• To update regulations on the use of class 2 injection wells to reflect the increased volume and known content of deep shale drilling and hydraulic fracturing waste 

• Regulate water withdrawal from public waters for hydraulic fracturing operations 

53 

• Prevent installation of wells in source water protection areas • Increase the bond required to cover for deep shale drilling and hydraulic fracturing operations • Increase the severance tax to pay for county-level remediation.’’ 

Like Attorney General Dewine’s recent statements, this call speaks to the inadequacy of Ohio law and enforcement capabilities to protect our air, water, and local 

economic health from the impacts of this industrial process. 

On this particular date as an elected official and one who has to answer to many 

constituencies, I do not believe the necessary safety regulations are in place to begin 

drilling in the Wayne National Forest in Athens, County, Ohio. 

As national leaders and policymakers, I implore you to stop kicking the can down 

the road to the next state, region or community. This is no different than the gas 

drillers who pick up and move their operations to a new locality after imparting 

damage. These issues demand thoughtful regulation at the national level. There are 

tens of thousands of voters who are negatively impacted everyday. Is the return 

worth the demonstrated risks? 

Mr. LAMBORN. All right. Thank you and thank all of you for your 

testimony. We will now begin our first round of questions. That is 

exactly why we are here, to learn about the need for regulation, 

and I in particular want to learn about state regulation versus Federal regulation. 

So I will start with you, Mr. Stewart. Do you see a difference between the two, and in your opinion, which would be better? Because there is no question that there is going to be and needs to 

be regulation, but which would be better? 

Mr. STEWART. Mr. Chairman, as I said in my testimony and I 

think you heard from Chief Simmers, most of the environmental 

laws that are being applied in the state are being applied underneath the landmark Federal laws, Clean Water Act, Safe Drinking 

Water Act, Clean Air Act, that delegate authority down to the 

states, because the states have their unique characteristics and, 

therefore, it is the best to leave it down to the states to do that. 

That is the reason the STRONGER organization exists particularly in terms of Resource Conservation and Recovery Act, to make 

sure the states keep that authority, but continuously identify gaps 

and make recommendations in ways to improve and ways to fill the 

gaps. So the states have generally been delegated as authorities 

over time. 

The State of Ohio has a complete and thorough regulatory structure. Just last year in the last general assembly, they enacted Senate Bill 165. That was the most significant amendment to oil and 

gas law since the law was created in 1965. It addressed all the 

issues being debated nationally and gave an Ohio response. Since 

that time, as I have testified, STRONGER has come in and peer 

critiqued that. The person that chaired the STRONGER review 

was one of the most noted environmentalists on oil and gas laws 

known in the United States. Dr. Puls, who was conducting the EPA 

study, sat in the on the review. The review team, which was endorsed by environmental stakeholders, state oil and gas agency 

stakeholders, industry, USEPA, USDOE, said the State of Ohio is 

professional, well managed, meeting its objectives and then there 

is added that there a lot to recommend to other states on how to 

do it right. 

Mr. LAMBORN. What does a natural gas company have to do in 

Ohio under Senate Bill 165 before it can drill? What kind of regulation or scrutiny does it face? 

54 

Mr. STEWART. Before you can get a drilling permit from the State 

of Ohio, you must have the ability, you must show the ability 

through bonding that you are prepared to meet all of the regulatory structures that are set forth in Ohio 1509 and the Ohio Administrative Code 1501. Then you must apply for a permit and 

show the plan to drill and construct and operate the well according 

to the regulations and the statute. Then you must apply that. 

As it relates to hydraulic fracturing, after 165, it was made clear 

that once you hydraulically fracture a well, you must submit to the 

public record what is called frack ticket which shows you everything that went into the well, at what stage it went into the well, 

how much of it went into the well, from the beginning, called the 

pad, to the very end, called the flush. You must hand in what is 

called a frack chart that shows you pressure and rate over time. 

All of those chemicals must be listed on MSDS sheets on the 

ODNR website. Because of that one amendment right there, 165, 

the Ohio Environmental Council wrote a letter in support of Senate 

Bill 165. And I have to note that 119 out of 130 members of the 

Ohio General Assembly who voted on the bill voted in support of 

Senate Bill 165. 

Mr. LAMBORN. Thank you. 

Mr. Taylor, you have already gone through this some already, 

but what is the difference in the economy locally now versus a few 

years ago before hydraulic fracturing combined with horizontal 

drilling was available? 

Mr. TAYLOR. It is in my report. There is a lot of affiliation. The 

steel industry is coming back to life. Two years ago or a little bit 

more, we had 40 percent unemployment in our local. With 40 percent of unemployment, we were very much having to reach out to 

areas across the country in order to provide employment for our 

members. Now not only do we have those 40 percent working, we 

are a hundred percent employed with no future layoffs. As reported, we had over 440 travelers from outside the country—from 

the country, from all over the country I should say, into the 

Mahoning Valley area working at one time or another drawing an 

income. 

So with that expansion, now we are looking into getting more 

places, touching the bases on training, experiencing growth that we 

have never even dreamed of having. 

Mr. LAMBORN. Thank you. 

Mr. Johnson? 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. 

Mr. Taylor, we will just continue on with you. In your testimony, 

you talk about this economic recovery that Mahoning Valley has 

seen in the past few years. Can you briefly explain how the morale 

of citizens in the Mahoning Valley, folks that you deal with every 

day, has changed because of all the development of shale and natural gas? 

Mr. TAYLOR. It is very easy to explain, Mr. Johnson, Congressman Johnson. Two years or better there was a gray cloud that was 

formed over the Youngstown area. Since the announcement of 

V&M Star and then with this industry, it has been a very optimistic attitude, very. The funds that we have created for our local 

55 

as well as for the membership and drawing an income has been up 

tremendously. 

As I stated before, two years ago when you have a lot of heartaches and you are really worried about what was happening within 

the community or outside the community and membership outside 

of the community, you tend to worry, and there is a lot of resources 

that you just can’t stretch out to have. Now we are just having a 

great optimistic attitude. The growth is huge. We are trying to plan 

for the future. We have put a program together called Pipe. It is 

a marketing program to not only reach out to young people to get 

into this industry, but also to explore trying to gather a greater 

market share. 

Mr. JOHNSON OF OHIO. Great. In your testimony, you said that 

you would rather be dealing with the headaches having too many 

opportunities rather than the heartaches of having no opportunities. How do you think the Plumbers & Pipefitters would react if 

the Federal EPA or other bureaucratic organizations in Washington issue new rules that will slow down this development and 

potentially cost your members their jobs? 

Mr. TAYLOR. It would be very tough because we don’t want to go 

back to what was in the past. There is 60 years of data that is 

here. Let us look at that. Let us improve what we can. Let us make 

it safe. Nobody wants it not safe. But we have enough where we 

can move forward and not stop what looks to be a bright future for 

us, especially in our industry. 

Mr. JOHNSON OF OHIO. Well, thank you. Thank you for those answers and thank you again for your testimony today, and I look forward to continuing to work with you and companies that are trying 

to make sure that this opportunity is there and available for the 

citizens of Eastern and Southeastern Ohio. 

Mr. Pounds, in your testimony you talk about the economic benefits that Ohio could see if a major petrochemical company placed 

a new ethane cracker. The Chairman reminded me under clothing 

of polyester suits, and I owned a couple of those. 

[Laughter.] 

Mr. JOHNSON OF OHIO. I am sure you probably did, too. I hate 

to put you on the spot here, but you wouldn’t happen to have any 

good news on that front today, on that cracker plant, do you? 

Mr. POUNDS. Well, I wish I could give you the answer you are 

looking for. I know that Royal Dutch Shell has indicated they are 

going to build a cracker in the Appalachian Midwest. I didn’t know 

when I was a kid that I lived in Appalachia, but I guess we did. 

That tells me it is West Virginia, Pennsylvania or Ohio, which is 

pretty obvious. While I hope it is on this side of that imaginary line 

that we call the border, I will tell you the good news is wherever 

it is at in the region, it is going to benefit our chemical industry 

and our folks in southeastern Ohio. 

We already have a chemical industry here. We already have a 

strong polymer/plastics industry in the state which are going to be 

major customers for the products of that cracker. The reason they 

want to do it in this region is that ethylene and some of the other 

fractions that you will take out of the ethane and the propane, they 

don’t like to travel. You don’t want to transport them. There are 

expenses in doing that. 

56 

So by fracking the stuff here and using it here locally, the chemical industry, I think, will see more chemical plants built, a lot of 

them in your districts. I think the ones that are already here are 

going to expand. We have tremendous resources as does Pennsylvania. We have the river with barging facilities along it in some 

of the sites that are being considered. We have tremendous workforce potential here. 

Mr. JOHNSON OF OHIO. Oh, absolutely. Correct me if I am wrong, 

but this is a manufacturing corridor all along Eastern and Southeastern Ohio. If we want to see manufacturing come back like we 

haven’t seen it in many, many years, these are products that would 

come out of that cracker plant that would go into many, many different forms of manufacturing and you think about the manufacturing companies that would come here and park on top of a nearly 

boundless source of energy because it would significantly reduce 

their operating costs. 

Is that a valid—— 

Mr. POUNDS. It is absolutely true. We already have had chemical 

companies contact us talking about when do you think we are 

going to know because we want to get looking at sites that are 

close to the cracker. 

Mr. JOHNSON OF OHIO. The Governor and Senator Portman and 

I, we have been working hard with trying to make sure that the 

Shell folks know that we want that cracker plant. 

Mr. POUNDS. We appreciate that very much. 

Mr. JOHNSON OF OHIO. Mr. Chairman, I have more questions. I 

will wait for the next round. I yield back. 

Mr. LAMBORN. We will have a second round of questions right 

after this. Then we will conclude. 

Mr. Thompson. 

Mr. THOMPSON. Thank you, Chairman. 

Mr. Pounds, I want to start with you. I want to wish you best 

of luck on the cracker, but I am not routing for you. 

[Laughter.] 

Mr. THOMPSON. I will make it real clear. I am from the Keystone 

state. But you know what? We are all going to win. 

Mr. POUNDS. Absolutely. 

Mr. THOMPSON. Let us break this down a little bit. And you got 

some of it referenced. I want to look specifically in Ohio. Can you 

give us some idea of the variety of manufacturers that use natural 

gas as a feedstock or as a process? 

Mr. POUNDS. Natural gas as an energy source to generate electricity, that is increasingly important, and obviously coal has got 

a target on its back primarily from the Federal EPA because of its 

war on carbon. 

So going forward that is going to be important to all manufacturing, because energy for most manufacturing companies, certainly in the chemical industry, is second or third on your cost 

structure. We are a very intense user of energy. So that is going 

to be important to all manufacturing in your state and Ohio certainly, being able to generate electricity from natural gas if we get 

to that point. 

57 

But for the chemical industry, the real advantage here is that we 

are going to be making ethylene from natural gas whereas our 

competitors in Europe primarily do it from oil. They buy oil. 

Mr. THOMPSON. We hear the term wet gas. Can you talk about 

that? There is no wet gas in my Congressional district. There 

seems to be obviously an extra advantage to wet gas. 

Mr. POUNDS. Certainly. Natural gas as a fuel for boilers is a commodity. Right now it is a couple of bucks, a little over a couple of 

bucks a million BTUs, British Thermal Units. When it has the wet 

gas fraction in it, the propanes, the butanes, the ethanes, that wet 

gas has much higher value because you don’t burn that as fuel. 

You take that off. You send it to the cracker. The cracker then produces the very high value ethylene, and then from the ethylene you 

go down to the other things. 

Those are all sold basically on performance, for medical devices, 

whatever people are fabricating, working with, and you are talking 

basically about the polymer side, the chemical business then, the 

absolute versatility, the productivity, the creativity of people that 

do that in the United States. You think about the plastics, for example, in hospitals, any kind of flexible tubing, whatever kind of 

properties you want for that. Essentially every material in this 

room has some sort of polymer content to it except those of us who 

have natural fiber suits, which I do not. 

I think if you just look around and consider that, it is such an 

integral part. We take it for granted to a great degree. But it is 

really the American manufacturing advantage over the rest of the 

world. I think that we can produce those kinds of products, continue to put a lot of research and development into it. 

So I think the potential for revitalizing the manufacturing corridor in Pennsylvania and Ohio is also absolutely incredible. Eighty 

percent of our gross domestic product in Ohio was from manufacturing. We are down under 50 percent now. But we are a manufacturing state. So I think it is coming back, and it is really becoming 

very encouraging. 

Mr. THOMPSON. So to take that one step further, in your opinion, 

let us take it right down to the individual citizen, people that live 

in every city, every borough, every township, how would they benefit from that? 

Mr. POUNDS. The American Chemistry Council economic study 

that I referenced, and I believe the Committee has it in their possession, talks about the job creation just in the chemical industryrelated piece of this of about 17,000 jobs, roughly 2,500 of those directly working in new chemical facilities or expanded facilities 

here, then another 6,000 or so that are going to be created because 

of the support structure, transportation, engineering, consulting, 

buying materials and supplies for the facilities, and then the induced effect which is when the folks that get those first round of 

jobs go out and spend money, you need government services, all 

that sort of thing. You get up to a number around 17,000. 

That is a pretty standard model that economists use, and I think 

it is pretty representative of what you can expect here. That is just 

related to the chemical industry. Other manufacturing, certainly I 

think you are going to see it come on along here. I have heard a 

lot of discussion about, particularly with the drilling site, those 

58 

people aren’t going to be permanent here. Well, that may be because they do have some special expertise in things. But the other 

jobs that are going to be created in the chemical industry, downstream from that, are going to be permanent jobs. I think it is 

going to be a tremendous increase. 

One of the issues we have in the chemical industry right now is 

job preparedness. Do we have the folks ready to work in the expanded chemical industry. Even the basic entry level chemical operator jobs require a pretty sophisticated educational background, 

not college, but we need to have people with good math skills, understand physics, chemistry, mechanical systems. So there is going 

to be much, much better kinds of jobs available to our citizens than 

there have been in the past. 

Mr. THOMPSON. I chair the Congressional Career and Technical 

Education Caucus with Mr. Langdon from Rhode Island, and I 

couldn’t agree more, the opportunities that are exciting for folks 

through career and technical education. 

Thank you, Chairman. 

Mr. LAMBORN. Thank you. 

For our second round of questions, thank you for your patience, 

for your earlier testimony. 

Mr. Stewart, there has been some concern expressed over 

groundwater and could it be contaminated during the drilling process or by the water that was used in the well after it is disposed 

of later. Can you address those concerns from your perspective? 

Mr. STEWART. The key to protecting groundwater resources is 

called casing in cement. You asked me earlier what steps you have 

to go through in the regulatory process in the State of Ohio. When 

you apply for a permit, you must put together a casing program 

that is then approved through the permitting process. 

The casing program is specifically designed to protect groundwater resources. It is called the initial strain, which is called surface casing, which is set through the groundwater resources and 

then cemented. So even if there were contaminants, as was suggested earlier, from other resources like coal mining, they couldn’t 

reach the surface casing. And it is even further protected by the 

initial strain. So the entire construction of the well is critical to the 

process. 

Where there have been problems with oil and gas development, 

almost always it is related to well, construction issues. So the State 

of Ohio and other states that have this activity are in a constant 

search about how to improve the regulatory structure specifically 

as it relates to well construction. 

Mr. LAMBORN. Thank you. Now, what about the disposal of water 

afterwards? 

Mr. STEWART. That is a very good question. 

Mr. LAMBORN. After it is used in the fracking process. 

Mr. STEWART. That is regulated underneath a process set up underneath the Safe Drinking Water Act called the Underground Injection Control Program. The best and most preferred method for 

managing low toxicity, high volume waste, which is produced water 

from formations, is to put it down a Class II well, otherwise put 

it in the same formation it came from or deeper. 

59 

Often under the Class II program set up by USEPA, the states 

gain primacy that delegated authority on behalf of USEPA to do 

that on their behalf and the states’. That is the case in the State 

of Ohio. Since the early 1980s, the Ohio DNR, the agency run by 

Rick Simmers, has set up a program for UIC Class II injection. In 

1985 it was actually the law of State of Ohio. 

It was enacted at that time that all produced water must be disposed of down a Class II well at standards exceeding the Safe 

Drinking Water Act, Federal landmark law. And since that time, 

there has been a system of Class II wells built up and down eastern Ohio to manage Class II just specifically from oil and gas wells 

taking on average 7 to 8 million barrels of produced water every 

year. 

Mr. LAMBORN. So the water that comes out of the well is put 

back into another well? 

Mr. STEWART. It is put down into a well specifically constructed 

to the standards of the Safe Drinking Water Act specifically designed to manage that waste stream and put back into the formation it came from or deeper. 

Mr. LAMBORN. Now, I have just seen a little bit of the proposed 

BLM regulations that have only come out several weeks ago, and 

I am still studying those. But I am concerned that it adds another 

layer of sometimes contradictory regulation on top of the current 

state regulation. 

What could that do to the economy that we are talking about was 

in the doldrums previously that now is coming back strong if we 

add that second layer of regulation and it—well, I have concerns. 

But tell me if those concerns are well founded or not. 

Mr. STEWART. That is a good question, Mr. Chairman. The draft 

that I have seen—I understand that there is no official rule promulgation or anything out for official comment. But I have seen a 

draft just this past week. My read on it is that they are trying to 

duplicate what is already been done with Frack Focus, a program 

set up underneath the Groundwater Protection Council in coordination with the Interstate Oil and Gas Compact Commission. So we 

have a Federal agency trying to duplicate what is already been 

done with excellence, which is also supported by industry, and 

many of the states’ regulatory agencies are lining up behind it as 

well. 

The other troubling point that I saw in it was that it also set up 

a duplicative reporting system where you not only report what you 

actually use, but try to predict what you would use, and it is very 

hard to do that, because you are never going to know exactly how 

you are going to stimulate a well until you expose the formation, 

have done electric logging on it, evaluate the formation potential, 

thickness, geology, rock characteristics, rock mechanics, to better 

understand how you are going to stimulate this well the most effective way possible. 

Mr. LAMBORN. There are different formulas and processes of putting it under pressure that are used in each well? 

Mr. STEWART. Oh, absolutely. Hydraulically fracturing the well is 

a function of petroleum engineering that is highly engineered to get 

exactly what you want to do. 

Mr. LAMBORN. So each well is unique? 

60 

Mr. STEWART. Absolutely. 

Mr. LAMBORN. Different from the next well? 

Mr. STEWART. Even from the well that was drilled half a mile 

away it can be very much unique. 

Mr. LAMBORN. So if the feds come in and say we want to know 

every time you make a change, that could just cripple the new well 

production? 

Mr. STEWART. What I read in the draft was that they are trying 

to get you to predict what you would use. And what I am testifying 

to, sir, is that that is very difficult to do, and in the end what you 

predict will more than likely not be what you actually use. 

Mr. LAMBORN. So at the end you go back to them every time you 

make even a minor change? 

Mr. STEWART. You create a bureaucratic system that doesn’t 

work. 

Mr. LAMBORN. That would just tie up production astronomically. 

Mr. STEWART. I admire the forestry department for going back 

and looking at their environmental assessment. Surface impacts 

from pad drilling are different from the type of drilling that has 

taken place in the Wayne National Forest over time. There are 

thousands of wells in the Wayne National Forest. I think they 

should look at the environmental impacts. But I don’t think that 

to put layering on of new regulation that is already being effectively done by the states underneath delegation from the Federal 

landmark laws and which has been proven by a peer-critiqued review process is going to be very effective. 

Mr. LAMBORN. Thank you. 

Mr. Johnson. 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. 

Back to that cracker plant, Mr. Pounds, is it safe to say that if 

state legislators that might be in opposition to hydraulic fracturing 

or the Federal bureaucrats are successful in getting a moratorium 

on hydraulic fracturing, do you think that cracker plant will come 

to Ohio or the Appalachia region? 

Mr. POUNDS. Representative, I really can’t answer that. That is 

a decision that is made at the corporate level of Shell. That is way, 

way beyond my ability to understand. But I would say that if there 

is a moratorium on fracking, I think we will have lost a once in 

a lifetime opportunity to really address more critically for the country our energy issue and, secondarily and most importantly, the 

chemical industry, our basic ability to be competitive in our chemical manufacturing and then derivatively through the entire manufacturing in the United States. 

Mr. JOHNSON OF OHIO. I appreciate that. 

Mr. Stewart, you sit on the board of STRONGER, an organization consisting of state regulators, industry officials like yourself, 

and environmentalists that look and evaluate states’ oil and gas 

regulations. 

Can you tell the Subcommittee today how Ohio’s oil and gas regulations stack up against other states’? 

Mr. STEWART. Mr. Johnson, the State of Ohio has gone through 

three reviews underneath the state review process, ’95, ’05 and 

then 2010. In the ’95 report they found regulatory gaps, suggested 

ways to improve, and from that came the very first what is called 

61 

RBDMS database system in which the public has vast new access 

to resources going on with oil and gas activity and the regulation 

from them. 

In 2005 following House Bill 278, there was another review that 

found the program to be well managed and functioned. In 2010 the 

report just specifically focused in on hydraulic fracturing and well 

construction issues. And that is when, as I testified, they said the 

program is well managed, professional, meeting its program objectives, and they have a lot to be proud about how they do the job. 

So the collaborative group of stakeholders representing parties 

that usually seem to make war on each other come together in a 

corral called the guidelines, which are the national set of guidelines 

itemizing elements necessary for good state regulatory program, 

they come together with their partners at USEPA and DOE and actually try to find ways to improve the situation instead of using it 

for political reasons. 

Mr. JOHNSON OF OHIO. In your opinion, what would happen to 

the oil and gas industry in Ohio if the Bureau of Land Management’s proposed rulemaking and regulating hydraulic fracturing for 

Federal lands is copied by the Federal EPA to regulate oil and gas 

development using hydraulic fracturing on private lands? 

Mr. STEWART. Mr. Johnson, I think it would be very difficult for 

them to overlay a regulatory system that has already been delegated down to the states. There is this threat that EPA will step 

into an area that they have never stepped into it as it relates to 

all of the states. Even EPA will tell you that in order to manage— 

we mentioned before 1.2 million wells have been hydraulically fractured over time here in the United States—it would be very difficult for them to effectively step in and manage that on behalf of 

the state. 

There are 36,000 wells drilled in this country every year. So 

what would happen, you would have a permitting morass that 

would stop oil and gas development in the United States, and the 

price of oil and gas would skyrocket, and Jack’s members would go 

back to the foreign countries that they were forced to go to in the 

first place. 

Mr. JOHNSON OF OHIO. Thank you. 

Ms. Papai, you stated a quote. There was one individual in there 

I believe—I can’t remember which one it was, but he said we can’t 

protect our water supply. 

Ms. PAPAI. The Mayor is concerned about protecting the water 

supply, yes. 

Mr. JOHNSON OF OHIO. His exact quote was what? He said we 

can’t protect our water supply, right? 

Ms. PAPAI. He said, quote, ‘‘Our city’s water supply, economy, 

safety, and public health will all be severely harmed by the sales.’’ 

Mr. JOHNSON OF OHIO. What science went into that? What analysis was done to lead him to that assertion, do you know? 

Ms. PAPAI. He gets his research and where—— 

Mr. JOHNSON OF OHIO. You are on the city council? 

Ms. PAPAI. I absolutely am. 

Mr. JOHNSON OF OHIO. Have you engaged with the state Department of Natural Resources? Have you looked at their regulatory 

process and have you met with members? 

62 

Ms. PAPAI. I have been doing that most recently and also at the 

ODNR and Ohio Revised Code that we have to follow, and there 

are many deficiencies. There are, dare I say loopholes, but situations for regulation. That is my largest concern, is the regulatory 

aspect of it. I have visited fracking sites. I have been to areas. 

Mr. JOHNSON OF OHIO. You stated in your testimony that there 

is one in Pennsylvania, I believe you said, where you cited an example where fracking had—— 

Ms. PAPAI. A study that had been done. 

Mr. JOHNSON OF OHIO.—contaminated drinking water. Is that 

what you said? 

Ms. PAPAI. Yes. 

Mr. JOHNSON OF OHIO. You know that for certain? Have you told 

the EPA about that? Because Lisa Jackson is looking for one. Have 

you notified the EPA that you have one? 

Ms. PAPAI. Well, there is the Pavilion Study that is out there. 

Mr. JOHNSON OF OHIO. I would encourage you to write a letter 

as soon as we are done here, because the Federal EPA is looking 

for one. So if you have an example of one, I would encourage you 

to do that. 

Ms. PAPAI. No problem. 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. I yield back. 

Mr. LAMBORN. And to Pennsylvania, Mr. Thompson. 

Ms. PAPAI. Go ahead, Mr. Thompson. 

[Laughter.] 

Mr. THOMPSON. Thank you. Thank you, Chairman. 

Ms. PAPAI. The Keystone state. 

Mr. THOMPSON. There you go, that is right, Keystone state. 

Mr. Taylor, first of all, as a proud dad of both a son and a daughter-in-law in the United States Army, thanks for what your union 

does, working on the partnership both of training programs that we 

have all supported and of putting our—they are not all young people. I do not want to say minor young people, but there are many 

heros of many different ages serving, that when they are done with 

that service, that they have a place of great training that they can 

come to. So I appreciate that. 

Mr. Taylor, how important are energy costs to the employers, the 

manufacturers, where your workers work? What kind of role does 

energy cost play for those job providers? 

Mr. TAYLOR. I can say that it is a big part of their budget when 

they go to bid a project. Up in the audience here, to answer that 

better, is Bill Cornell from McCarl’s. He is vice-president of operation construction. And he can tell you the cost factors and the 

breakdown of it. Since I represent the labor side, we have our goals 

in training and then in capabilities of the manpower. But I can tell 

you that when we sit down to discuss—we have within our organization a great labor/management group. When we sit down, we talk 

about the situations within our industry, the pitfalls, the positives. 

We try to work together on them. And that is a constant conversation, is the outside, not just the wages, but all the expenditures 

that goes into a project for a bid to make a profit for a business. 

Mr. THOMPSON. We have had a time just 3, 4 years ago that nat- ural gas was $13, $14 a thousand cubic feet. It is $2.40 today. So 

let us go back in time when the natural gas, we had to rely on 

63 

other countries for some of it. Is it fair to say that when energy 

costs are high, it is crushing to jobs here in Ohio? 

Mr. TAYLOR. Yes, very much so. 

Mr. THOMPSON. Thank you. 

Mr. Stewart, I talked in my opening comments natural gas needs 

to be pursued. It is an opportunity to seize, but the responsibility 

falls on all of us to do that and certainly to protect the public interest and protect both the health of people, citizens and environment. 

So in your opinion, why are states best suited to accomplish that 

mission versus the Federal Government? 

Mr. STEWART. EPA’s regulatory report in 1988 to the U.S. Congress as it related to regulation, Subtitle C of the Resource Conservation Recovery Act, EPA recommended to Congress and then 

Congress further adopted specific treatment to oil and gas that recognized that because of the unique geologic, geographical, population, industry characteristics that changed from state to state, 

that it is the states, therefore, that are the best regulators for this 

industry. And that philosophy has generally carried through under 

treatment underneath Clean Water Act, Safe Drinking Water Act, 

Clean Air Act, where they delegate that authority down because 

the states know their individual specifics better. 

That is another way of saying that Pennsylvania and Ohio really 

are not alike. There is a reason the river runs through it. We are 

all different from Texas. And Texas is different from California, 

thank God, and we are all different from Alaska. 

Mr. THOMPSON. I thought we put that river there just to stop immigration. 

[Laughter.] 

Mr. STEWART. Actually it was geology. 

Mr. THOMPSON. Oh, it was geology. A follow-up to that then, and 

you really started to address that, why would a Federal law or 

frankly Federal primacy over regulation of oil and gas be virtually 

impossible to implement? 

Mr. STEWART. At the Federal level, sir? 

Mr. THOMPSON. Yes, sir. 

Mr. STEWART. Because there is so much activity happening in 

each of the individual states that Federal command and control run 

off of Constitution Avenue there in downtown D.C. would not be 

able to keep up and manage all the different permits. There are 

144,000 UIC wells operating in the United States to manage, 

produce waters from among the 33 producing states. Managing permitting obligations just for that one small sector of the industry 

would overwhelm USEPA, and they know it. 

Mr. THOMPSON. I have a couple questions I want to ask. Some 

of the folks that were here and left, these are some of the claims 

I hear. Number one, that hydrofracking in particular is something 

that is new, that we are experimenting on the citizens. Can you address that? 

Mr. STEWART. There is nothing new about hydraulic fracturing. 

The way my father did his first frack job in 1953 is the exact same 

principle, the frack jobs I did during my career and are being performed today in the oil and gas industry. It is simply a matter of 

taking a hydraulic medium, fresh water, applying it against the 

reservoir rock and at a certain pressure you induce a fracture in 

64 

the rock creating a pathway for the oil and gas to more efficiently 

come into the wellbore. It is exactly the same process. 

We talked about it earlier today, and I think it was maybe you 

that mentioned it, the difference is horizontally drilling laterals. 

And you said it I think, sir, that you could drill like 25 vertical 

wells and come close to achieving the same—you said it, Mr. Chairman—you can achieve the same process or you can do it very efficiently by going down, making a lateral, drilling out 6,000 feet, exposing 6,000 feet of the reservoir rock to the wellbore and creating, 

in effect, 25 or 30 wells inside one wellbore. That is the only difference. 

Now the rock doesn’t know whether you are going horizontally or 

vertically. It has no idea. 

Mr. THOMPSON. If the Chairman will bear with me, just one 

other, because these are views that folks have, and I think it is important to have this debate. 

I also hear the claim that why are we doing this when frankly 

it had been 152 years since we drilled that first well. So in 152 

years we have essentially exhausted all the oil and natural gas 

that is available. That is why we have to move to a green alternative immediately. I want to get your response to that. That is a 

claim I hear. 

Mr. LAMBORN. Then we have to wrap up. 

Mr. STEWART. Mr. Thompson, we are changing that. We are producing so much natural gas in this country that it is treated at severe discount to historic values. There is so much crude oil that is 

being produced in the Bakken shale that despite what everybody 

thinks is a high priced crude oil, it is traded at a $15 to $17 discount compared to world oil prices. 

The United States is always ranked in the top five in oil and 

crude oil production and ranked, I think, in the top ten in oil and 

gas reserves. What we have done is used technology to unlock the 

key to where the bore was actually fed all of the 150 years. We are 

in a new era. 

Mr. LAMBORN. OK. Thank you for your responses. I wish we had 

more time to ask questions of this panel, but we have a schedule 

to keep. Thank you for being here. 

I would like to now welcome and invite forward Mr. Ed Looman, 

Executive Director of Progress Alliance; Mr. Dennis Heller, President and CEO of Stephenson Equipment, Inc. and with Associated 

Equipment Distributors; Dr. Robert Chase, Chairman and Professor of the Department of Petroleum Engineering of Marietta College; Ms. Christine Hughes, Owner of Village Bakery and Cafe, 

Della Zona Restaurant, Catalyst Cafe Bakery—I hope you brought 

some samples today—and Mr. Nathan Johnson, Staff Attorney at 

the Buckeye Forest Council. 

Like all of our witnesses, your written testimony will appear in 

full in the hearing record, so I ask that you keep your oral statements to 5 minutes as outlined in our invitation letter to you and 

under Committee Rules. The timing lights are green at first. After 

4 minutes they turn yellow, and then after 5 minutes they turn 

red. 

So we will now go down the line. Thank you all for me being here 

and giving us your valuable time. 

65 

Mr. Looman? 

STATEMENT OF ED LOOMAN, EXECUTIVE DIRECTOR, 

PROGRESS ALLIANCE 

Mr. LOOMAN. Thank you, Mr. Chairman, Congressmen, welcome 

to Jefferson County. Eastern Ohio is quickly becoming a national 

hub for continued growth and development of the shale industry. 

Recent studies have indicated the Utica and Marcellus shale industry could help create and support more than 200,000 jobs from now 

until 2015 in Ohio. We could experience an overall wage and personal income boost of $12 million by 2015. 

Additionally, royalty payments to landowners, schools, businesses and communities could increase to as much as $1.6 billion 

by 2015. Total tax revenues expected to rise from now until 2015 

and reach roughly $479 billion. Industry expenditures related to 

Utica shale alone development could generate approximately $12.3 

billion in gross state product and result in the statewide output of 

sales of more than $23 billion. 

I believe this data speaks directly to the name of today’s hearing, 

creating jobs and community growth. This area of Ohio has been 

given great geological gifts, and the economic potential is tremendous. The area you are visiting today has a very rich history. It 

once was a sprawling steel making area, also benefited from years 

of activity related to the mining of coal. Since the well documented 

struggles of the steel industry began, this area and its hard working people have suffered. Thousands of good paying jobs that we 

once had have now disappeared. 

Thus the shale industry represents a major, major opportunity 

for Jefferson County and other counties in eastern Ohio. Some have 

labeled it as a once in a century opportunity. Jobs expected to be 

created will impact generations to come with new employment opportunities. Already thanks to the shale industry, we have seen a 

new wealth created in this area thanks to royalty payments. Local 

unemployment rate has fallen nearly 2 percent from 2010 to 2011, 

again thanks to these new employment opportunities. 

Progress Alliance, I would point out, is the public/private economic development organization serving Jefferson County. We are, 

I am very proud to say, a true public private partnership. Our 

funding comes from both government and private business. The 

mission of Progress Alliance is three-fold in nature, attract new 

jobs in Jefferson County, work with those outstanding companies 

we have to keep them here and help them grow, and market Jefferson County as a great place to live, work and place. 

In recent months the activity level at Progress Alliance has hit 

record level. We either have or are working with more than 35 

companies looking to move here as part of the shale experience. 

Each prospect tells us the same thing, companies want to support 

existing local businesses and hire local workers. 

We are experiencing a time like never before. Attraction efforts 

for us have taken on a whole new meaning. Generally speaking, we 

had to go out and beat the bushes and now the bushes are beating 

us. And we love that kind of mode of operation. Job creating prospects are stopping by our office on a regular basis unexpectedly 

66 

looking for land, looking for a building to establish operations and 

looking for opportunities to hire local workers. 

One of the other things you need to understand is that Jefferson 

County has taken many steps to prepare itself for what lies ahead. 

Our county commissioners have formed an oil and gas committee 

designed to address issues related to communications and education. Eastern Gateway College that you are visiting today is providing training for our workforce. A community action commission 

has developed informational workshops designed to prepare local 

workers for opportunities in the shale industry. 

We are also working to improve our services including possible 

extension of the runway at our Jefferson County Air Park to support additional corporate traffic along with the installation of an 

automated weather observation system. 

My goal today would be to help you understand that the shale 

industry represents a major opportunity for this area of Ohio. It is 

an opportunity for us to recover, an opportunity for us to move forward. This energy opportunity does indeed represent an opportunity to create thousands of jobs and allow this community and 

others in shale play to grow. Those of us living inside this play and 

those living outside all must understand that we have a huge opportunity here and one that we cannot let slip away. 

To not totally pursue the opportunity together, to overregulate 

this opportunity and to miss this opportunity would be a major 

mistake on all of our parts. Thank you very much. 

[The prepared statement of Mr. Looman follows:] 

Statement of Ed Looman, Executive Director, Progress Alliance 

Eastern Ohio is quickly becoming a national hub for the continued growth and 

development of the shale industry. 

Recent studies have indicated the Utica and Marcellus shale industry could help 

create and support more than 200,000 jobs from now until 2015. Ohio could experience an overall wage and personal income boost of $12 billion by 2015 from industry 

spending. 

Additionally, royalty payments to landowners, schools, business and communities could increase to as much as $1.6 billion by 2015. Total tax revenue from oil and 

gas exploration and development in the Utica shale formation from now until 2015 

is projected to be roughly $479 billion. Industry expenditures related to Utica shale 

development could generate approximately $12.3 billion in gross state product and 

result in a statewide output or sales of more than $23 billion. 

The data speaks directly to the name of this hearing: creating jobs and community 

growth.’’ This area of Ohio has been given great geological gifts and the economic 

potential is tremendous. 

The area you are visiting today has a very rich history. It once was a strong steelmaking area. It also benefitted from years of activating related to the mining of 

coal. Since the well-documented struggles of the steel industry began, this area and 

its hard-working people have suffered. The thousands of good-paying jobs that once 

were available have disappeared. 

Thus, the shale industry represents a major opportunity for Jefferson and surrounding counties. Some have labeled it ‘‘a once in a century opportunity.’’ The jobs 

expected to be created will impact generations of local residents. 

Already, thanks to the shale industry, we have seen new wealth created in our 

area thanks to royalty payments. The local unemployment rate fell nearly 2 percent 

from 2010 to 2011 thanks to new employment opportunities. 

Progress Alliance, I would point out, is the public-private economic development 

organization serving Jefferson County. We are, I am proud to say, a true public-private partnership. Our funding comes from both government and private businesses. 

The mission of Progress Alliance is three-fold in nature: attract new jobs to Jefferson County, work to retain those already here and provide assistance when existing 

companies look to expand; and market Jefferson County as a great place to live, 

work and play. 

67 

In recent months, the activity level for the Progress Alliance staff has hit a record 

level. We either have or are working with more than 35 companies looking to move 

here as part of the shale experience. Each prospect tell us the same thing: the company wants to support existing local businesses and hire local workers. 

We are experiencing a time like never before. Job-creating prospects are stopping 

by on a regular basis, looking for land or a building to establish a local operation. 

You also need to understand that Jefferson County has taken many steps to prepare itself for what lies ahead. Our county commissioners have formed an oil and 

gas committee designed to address issues related to communication and education. 

Eastern Gateway Community College is providing training to our workforce. Our 

Community Action Commission has developed informational workshops designed to 

prepare potential workers. 

Also, the county is working to improve its service, including the possible extension 

of the runway at the Jefferson County Airpark and the installation of an Automated 

Weather Observation System. 

My goal today is help you understand that the shale industry represents a major 

opportunity to help this area of Ohio recover and move forward. Truly, this new energy opportunity does indeed represent an opportunity to create jobs and allow communities to grow. 

Those of living inside this play and those outside all must understand the opportunity we have. To not totally pursue this opportunity together, to over-regulate this 

opportunity and to miss this opportunity would be a major, major mistake. 

Mr. LAMBORN. Thank you. 

Mr. Heller? 

STATEMENT OF DENNIS HELLER, PRESIDENT/CEO, 

STEPHENSON EQUIPMENT, INC. 

Mr. HELLER. Good morning, Chairman and Distinguished Members of this Subcommittee. 

It is certainly my pleasure to be here with you both as President 

and CEO of Stephenson Equipment. We are a company that sells 

and rents construction equipment in Pennsylvania and New York. 

We are also as a member of the Associated Equipment Distributors 

board of directors. 

First I am going to discuss how my company has benefited from 

shale energy and the impact that this is having on our industry 

and the need for the Federal Government to stay out of this growing segment. Shale energy has had tremendous growth potential at 

our company over the last two years. In fact, nearly ten percent of 

my company’s 120 employees have positions directly attributable to 

the Marcellus shale. 

The energy companies that are coming into the state have invested millions of dollars on roads, road improvement to move the 

sand, water, pipe and materials to and from job sites. As a result, 

they are renting equipment from Stephenson Equipment. 

The next growth segment we have seen is in crane sales. We are 

a large dealer of mobile cranes, and we provide sales, rentals and 

operator training. An example of that is a crane that is mounted 

on a ten-wheel Peterbilt. It is a highly mobile crane. It sells for 

about a half a million dollars. We also sell those. We provide parts 

and service business for these, and it has provided tremendous opportunity for my employees. 

In 2009 as an example, we would have purchased 17 cranes for 

sale and rent. Last year we purchased 55. Again, taking the ticket 

price, this is a lot of dollars. To give you a true idea of the economic 

impact on our company, we just need to look at the numbers. In 

2010, our revenues were $61.4 million. Last year we were over $73 

68 

million. This growth came from one area, and that is simple: 

Marcellus shale. 

Stephenson Equipment is not unique to this. In preparation for 

this hearing, AED conducted a survey among equipment dealers in 

Ohio and Pennsylvania that have play in the energy segment. Fifteen of the companies surveyed employ more than 3,000 workers. 

Fourteen of those companies said some portion of their 2011 revenue was directly or indirectly attributable to the Marcellus shale. 

In aggregate, the increase among those companies was $356 million for a total of $25 million average increase per company. 

Mr. LAMBORN. Wow. 

Mr. HELLER. Several of the companies said that last year was a 

record year for them, and that is a stark difference from our dealers in other areas of the country that do not have Marcellus or 

energy play. They are still in a recession or depression. Past economic data indicates that for every dollar spent on construction 

equipment generates $3.19 economic benefit to the economy. Thus 

the 2011 shale energy-related revenues equal about $1.135 billion. 

As might be expected, the equipment market is creating and sustaining many jobs. Most respondents to the survey said about 25 

percent of their employment was a direct result of the Marcellus 

business, and that currently was about 574 estimated jobs. The 

Marcellus business hits every dealer level. It doesn’t matter what 

type of dealer. We happen to be crane and road equipment, but you 

could be selling skid loaders, earth moving equipment or gloves. 

You are affected by this industry. 

So it is a very far-reaching business, and it has been very good 

for our operation in Pennsylvania. And it is not surprising that 

equipment dealers in both Pennsylvania and Ohio overwhelmingly 

believe that Marcellus shale has the potential to be an economic 

game changer in their future. 

Comments from the survey respondents specifically on energy 

and the development of their companies, the industry, the local 

economy can be found in my written testimony. They paint a dramatic picture and are worth reading. 

In conclusion, Mr. Chairman, medium sized companies like mine 

are seeing unprecedented growth. We believe policymakers must 

protect public health, safety and the environment while allowing 

the shale industry to grow and prosper. Furthermore, bureaucrats 

in Washington must refrain from regulating this industry from 

their desk and allow the state governments to measure the benefits 

and impacts of shale energy development. I appreciate any questions. Thank you for the opportunity to speak. 

[The prepared statement of Mr. Heller follows:] 

Statement of Dennis Heller, President and Chief Executive Officer, 

Stephenson Equipment, Inc., Harrisburg, Pennsylvania, on Behalf of 

Associated Equipment Distributors 

Chairman Lamborn, Ranking Member Holt, and other distinguished members of 

this subcommittee, my name is Dennis Heller, and it is my pleasure to appear before you today both as a small business owner, directly impacted by energy shale 

development, and in my capacity as a member of Associated Equipment Distributors 

(AED) Board of Directors. 

I am the president and chief executive officer of Stephenson Equipment, a company that sells and rents construction equipment and provides crane service, parts, 

69 

and operator training at seven locations in Pennsylvania and New York. Stephenson 

Equipment has 120 employees. 

AED is the trade association representing distributors of construction, mining, energy, forestry, industrial, and agricultural equipment. AED has more than 500 

members, the overwhelming majority of which are small businesses. AED’s average 

member achieves about $40 million per year in revenues and employs 80 people. 

I appreciate the opportunity to come before the Committee to discuss how my 

company is benefiting from shale energy extraction, the positive impact on the construction equipment industry, the impact on the broader economy, and guiding principles for policymaking in this area. 

Impact of Shale Energy Development on Stephenson Equipment 

Shale energy extraction has resulted in exponential business growth at Stephenson Equipment over the last two years. In fact, nearly 10 percent of my company’s 

120 employees have positions directly attributable to Marcellus Shale energy development. 

Stephenson has benefitted on several fronts. Energy companies have invested substantial resources in building and expanding roads and highways for hauling sand, 

water, pipes, and other materials to and from the Marcellus Shale. Backhoes, pavers, and rollers are working across northern Pennsylvania providing the infrastructure needed to transport materials and workers to fracking sites. Additionally, 

Stephenson’s rentals, part sales, and service calls have grown substantially. 

Perhaps the largest growth is evident in crane sales. Stephenson Equipment offers a complete line of cranes and operator training. One of the hottest sellers is 

a crane mounted on a 10-wheel Peterbilt truck that is one of the core products used 

at fracking sites to handle pipe, coiling, and rig erection. These sell for over 

$500,000 apiece. The sale and rental of these cranes, combined with the parts and 

services business, has been a boon for my company and its employees. In 2009, we 

purchased 17 cranes for sale and rental and two years later, we purchased 55 cranes 

for sale and rental. The reason for the jump in sales is simple—the Marcellus Shale. 

To give you an idea of the true economic impact of energy shale development on 

Stephenson Equipment, we just need to look at the numbers. In 2010, my company’s 

revenues were $61.4 million. The following year, we saw a 16 percent increase in 

revenues to $73 million. Furthermore, my Pennsylvania locations generate more 

revenue and are more profitable than my New York locations because of shale energy extraction. 

Shale Energy’s Impact on the Construction Equipment Industry 

Stephenson Equipment is not unique in having been positively impacted by the 

shale energy boom in the region. In preparation for this hearing, AED conducted 

a survey of its members in Ohio and Pennsylvania with operations in the Marcellus 

and Utica shale regions. The results provide a compelling snapshot of the impact 

that shale energy development is having on the equipment industry. Note however 

that the results discussed below only capture the impact on companies that participated in the survey and AED has not sought to project results across its broader 

membership. 

Fifteen equipment companies with combined employment of 3,176 workers responded to AED’s online survey, which was conducted between Feb. 17 and Feb. 22. 

Fourteen companies (93 percent of respondents) said some portion of their 2011 revenues was directly or indirectly derived from shale energy development. The total 

aggregate revenue from that activity for all respondents in 2011 was $356 million. 

The average shale energy-related revenue was $25.4 million per company. 

Anecdotally, several responding companies reported that 2011 was a record year in 

an industry that is still in a depression in other parts of the country where shale 

energy is not a market factor. 

A 2008 economic study by Professor Stephen Fuller at George Mason University 

in Fairfax, Virginia estimated that, ‘‘[e]very dollar of direct spending for the purchase of heavy construction equipment generates a total of $3.19 in economic impact—one dollar of direct spending and $2.19 in indirect and induced economic activity from the re-spending in other sectors of the national economy of monies paid 

to equipment distributors.’’ Thus, AED estimates the total economic impact of the 

aggregate revenues from shale energy activity reported by Pennsylvania and Ohio 

survey respondents at $1.135 billion. 

As might be expected, the equipment market activity is creating and sustaining 

many jobs. Survey respondents directly or indirectly supporting the shale energy industry report that an average of 24.7 percent of their workforce in Ohio and/or 

Pennsylvania is attributable to that activity. AED calculates that shale energy is 

70 

supporting 574 jobs at the equipment distribution companies that responded to the 

survey. 

According to survey participants, the shale energy industry and businesses that 

support it are utilizing the full range of equipment AED members sell, rent, lease, 

and service. Every segment of the dealer universe is being touched by shale energy; 

distributors who specialize in small equipment, such as skid steer loaders, and in 

specialty products are just as likely to benefit as dealers who sell heavy 

earthmoving equipment. 

Not surprisingly, equipment distributors in Ohio and Pennsylvania overwhelmingly believe that the shale energy sector has the potential to be an economic game 

changer for the industry. Eighty-seven percent of survey respondents said that if the 

shale energy sector continues to grow, it will have a significant and positive impact 

on their companies, allowing them to expand and add new workers. Thirteen percent said they expect the shale energy sector to have some impact but that it would 

not be a significant factor in their future success. It is notable that not a single respondent said they did not expect shale energy to have at least some positive impact 

on their company in the years ahead. 

In addition to providing objective data, Pennsylvania and Ohio construction equipment distributors responding to the survey made the following comments about the 

impact of shale energy development on their companies, the industry, and the economy as a whole: • ‘‘In 2011 alone our company hired 100 new people to serve this market which 

we have only been involved with for two and half years.’’ • ‘‘[Shale energy development has led to] the only growth of new jobs in western Pennsylvania since steel and other mills left in the 80’s.’’ • ‘‘The shale gas industry has created many new job positions and will continue 

new jobs as we grow this segment. The contractors performing the work have 

been very responsible and very good to the local economy and Pennsylvania 

businesses. We are pleased with the care [with which] they manage job site 

safety, security and concern to protect the environment. Based on the shale 

market, we see future growth for our company combined with our suppliers.’’ • ‘‘[Our company] conducts business in the eastern Pennsylvania areas. To date 

we have not directly felt the shale energy impact although we feel strongly 

that if allowed to continue and/or to expand, either a direct impact or strong 

positive indirect impact will be felt by our company by way of rentals or sale 

of equipment.’’ • ‘‘We are seeing activity from the people getting royalty checks, the drilling 

companies and their contractors. The bigger potential long term impact is on 

people supporting those activities in hotels, restaurants, housing and other 

related businesses. We expect this to continue to grow IF the political environment allows that to happen.’’ 

• ‘‘If shale energy exploration is allowed to progress, the only unemployment we 

should see in Pennsylvania or Ohio will be those who do not want to work. 

Besides the temporary jobs created from drilling and pipeline work, permanent jobs will be created from proposed cracker plants and refineries. Safe exploration practices should be emphasized, but not at the expense of progress.’’ 

• ‘‘The shale energy sector is having a profound effect on my company. We are 

currently reorganizing our internal structure and facilities to accommodate 

the projected increase in business. After what our business has been through 

over the past several years in this challenged economy, Marcellus Shale is a 

needed shot in the arm. In addition to projected revenues of $1.5 million in 

2012 from the shale sector, we are currently projecting capital expenditures 

for tooling and equipment in excess of $1 million in order to position our company for future years in the Marcellus Shale play areas. The road to 

Marcellus Shale is paved with gold for all involved if our leaders do not get 

in the way!’’ 

• ‘‘While driving demand for some of our products upward, it is also affecting 

the availability of skilled service technicians and mechanics. While such a 

scarcity is a negative in the short run, in the long term it increases the need 

for skilled workers and drives both employment and wages.’’ 

• ‘‘The developing shale gas opportunity in Ohio and Pennsylvania is increasing 

business activity and demand for construction products in all facets of our 

business—parts, service and sales. This positive impact will continue with direct benefits as long as well-sites and pipelines are constructed, and with continuing indirect benefits from the economic prosperity that results in infrastructure and commercial growth.’’ 

• ‘‘We have been anticipating an increase in our shale play related business for 

about nine months, and this business began growing for us in the fourth 

71 

quarter of 2011. Over the next three to five years, we expect this business 

to grow exponentially, and we expect the business to be very demanding and 

very profitable. We have now dedicated two individuals full-time to manage 

old and new customer relationships, and we are developing expectations, procedures and systems internally to support this growing business segment. 

Much of the business will be rental, though we have sales opportunities associated with [original equipment manufacturers] that are providing equipment 

to the firms who are focusing on the shale play. Servicing the customer is our 

#1 priority, on their terms, which are different and/or more demanding than 

the average customer’s. Risks do exist for us in this business, pertaining to 

how much inventory and how many personnel we dedicate to this business. 

Overall, we are thankful to see this business opportunity in Ohio, and we are 

hopeful that excessive regulation doesn’t choke it off before we and the State 

of Ohio capitalize on the opportunities.’’ 

The Entire U.S. Economy Benefits from Shale Energy 

The entire U.S. economy is reaping the economic benefits from energy shale development. According to an IHS Global Insight study prepared for the America’s Natural Gas Alliance, the shale gas contribution to Gross Domestic Product (GDP) was 

more than $76 billion in 2010. Assuming Congress permits shale energy development to continue, projections show this sector increasing to $118 billion by 2015, 

and tripling to $231 billion in 2035. 

Additionally, the shale gas industry is creating a significant number of jobs. According to the same study, in 2010, shale gas supported over 600,000 jobs, which 

included 148,000 direct jobs in this country, nearly 194,000 indirect jobs in supplying industries, and more than 259,000 induced jobs. Over 63,000 of these jobs 

were in the construction sector, one of the hardest hit by the recession. 

Importantly, with all levels of government struggling to generate revenues, IHS 

Global Insights found that in 2010 shale gas production contributed $18.6 billion in 

federal, state, and local government tax and federal royalty revenues. By 2035, 

these receipts will more than triple to just over $57 billion. On a cumulative basis, 

the shale industry will generate more than $933 billion in federal, state, and local 

tax and royalty revenues over the next 25 years. 

The Federal Government Should Stay Out of the Way 

The economic and job creation benefits of energy shale development are clear. 

However, in order for the economy to reap the full reward from shale energy, the 

federal government must refrain from micromanaging the industry and defer to 

state regulators. It is AED’s position that: 

• Advancing technologies in horizontal drilling and hydraulic fracturing have 

made possible production of vast and previously unavailable reserves of natural gas and oil from shale. This has created hundreds of thousands of jobs, 

enhanced energy security, spurred economic growth, improved manufacturing 

competitiveness, and lowered the cost of energy to consumers. Public policy 

should facilitate and encourage continued development to the greatest extent 

possible. 

• Other new methods of extracting oil and gas from shale should be pursued 

with continued aggressive research and development, and when economically 

viable, production. 

• Balanced regulation is necessary to protect public health and the environment, while encouraging innovation and expansion in the shale energy industry. 

• The benefits and impacts of shale energy development are best measured and 

understood at the state level. It should therefore continue to be regulated locally and not by the federal government. 

Conclusions 

The shale energy sector is flourishing and many sectors of the economy are reaping the economic benefits. The small companies that comprise the construction 

equipment industry, such as Stephenson Equipment, are seeing unprecedented 

growth directly resulting from shale energy development. However, imprudent government action could undermine the viability of this sector. 

Policymakers must protect public health, safety, and the environment, while allowing the shale energy sector to continue to grow and prosper. Furthermore, bureaucrats in Washington must refrain from regulating the industry from their desks 

in the nation’s capital and allow state governments to measure the benefits and impacts of shale energy development. 

72 

Mr. LAMBORN. OK. Thank you. 

Dr. Chase? 

STATEMENT OF ROBERT CHASE, CHAIRMAN/PROFESSOR OF 

THE DEPARTMENT OF PETROLEUM ENGINEERING, 

MARIETTA COLLEGE 

Dr. CHASE. Thank you, Chairman Lamborn, Congressman Johnson, Congressman Thompson. I am honored to be asked to testify 

before you today regarding the impact natural gas can have on 

America’s future. 

I have been serving as the Chairman of the Department of Petroleum Engineering and Geology at Marietta College for the last 35 

years. I have had close to a thousand students go through my program and take their place in industry all over the globe. My students now numbering 300, nearly 300 in the petroleum engineering 

program and 49 in the geology program come primarily from Ohio, 

Pennsylvania and West Virginia. I also have students from all 

around the country and the world, including Saudi Arabia, Kuwait, 

China and Africa. 

We offer only an undergraduate program and BS degree in petroleum engineering at Marietta College, but we are the only small 

private liberal arts college in the Nation to offer this unique major. 

This year I have had over 20 companies on campus recruiting my 

seniors for permanent jobs and my underclassmen for summer internships. Our graduates are in high demand. The manpower demand won’t stop with just engineers and geologists, however. 

I have been working closely with Washington State Community 

College and the Washington Career Center in an effort to help 

them prepare curricula that will educate and train technicians and 

field personnel that the industry will require going forward. Several other technical colleges around the state are also preparing 

tracks of study for their students that will prepare them for jobs 

in our industry as well. 

I have been teaching courses in natural gas engineering for 37 

years. My Master’s and Ph.D. research were focused on gas storage 

and producing methane from coal respectively. By the way, all 

three degrees are from Penn State. I have had research contracts 

with the Department of Energy and the Gas Research Institute in 

Chicago, with all of my research being focused on natural gas engineering topics. 

While we knew we had vast resources of natural gas in coal and 

shale back in the ’70s, we just did not have the technology necessary to free that resource from the very low permeability or tight 

reservoir rocks. The natural gas trapped into those rocks was uneconomical to recover because technology had not been developed 

yet to get that gas out of the rocks, but things have changed dramatically in the U.S. in just the last ten years. Advances in horizontal drilling that had been traditionally employed mainly in offshore environments and multistate fracturing have opened up vast 

untapped resources of natural gas and oil in shale formations like 

the Marcellus and Utica. 

The recent study released by U.S. Energy Information Agency revised the unproved technically recoverable reserves of natural gas 

in the Marcellus shale down to 141 trillion cubic feet. That 42 perVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00076 Fmt 6633 Sfmt 6602 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
73 

cent revision downward means that the Marcellus still has the potential to meet the nation’s entire natural gas needs for the next 

seven years. Just 15 or so years ago the nation’s total proven natural gas reserves were only 200 trillion cubic feet. We have come 

a long way. Now one formation alone in the back yard of Appalachia boasts the same reserves. 

The Utica shale is in its infancy of development, and its recoverable reserve potential cannot be estimated with any accuracy yet, 

but one thing is known: Some of America’s largest oil and gas companies have wagered billions of dollars and placed it in the hands 

of landowners. Companies have leased over 4 million acres of land 

in Ohio with the expectation of producing both gas and especially 

oil in commercial quantities. There is a lot to be said about contamination, that we hear about contamination of groundwater, and 

Tom Stewart addressed a number of the issues that I thought were 

very important. And I would just like to say a few things about 

that. 

Along with the development of our shale resources comes the necessity to care for the environment. Thanks to movies like Gas 

Land that are rooted more in fiction than fact, the public has been 

polarized against the process of hydraulic fracturing which is an 

absolute necessity in the process of extracting gas and oil from 

tight shale formations. Over a million wells have been fracked in 

the U.S. since the 1940s and over 60,000 wells in Ohio alone. There 

are no data to substantiate the claims made in Gas Land that hydraulic fracturing contaminates groundwater. 

In fact, a recent study just released by the University of Texas 

affirms the fact that fracking does not contaminate groundwater. 

In another paper published by George E. King of Apache Corporation through the Society of Petroleum Engineers, King estimates 

that in a worst case scenario, that the odds of a hydraulic fracture 

treatment in a formation less than 2,000 feet deep penetrating a 

fault that extends back to the surface are one in 200,000. He estimates the chance of this happening in a strata deeper than 2,000 

feet being zero. Thank you. 

[The prepared statement of Dr. Chase follows:] 

Statement of Dr. Robert W. Chase, Marietta College, 

Department of Petroleum Engineering and Geology 

Chairman Lamborn, Congressman Johnson, Congressman Thompson, guests, I am 

honored to be asked to testify before you today regarding the impact that natural 

gas can have on America’s future. 

I have been serving as the chair of the Department of Petroleum Engineering and 

Geology at Marietta College for the last 35 years. I have had close to 1,000 students 

go through my program and take their place in industry all over the globe. My students, now numbering nearly 300 in the petroleum engineering program and 48 in 

the geology program, come primarily from Ohio, Pennsylvania and West Virginia. 

I also have students from all around the country and the world, including Saudi 

Arabia, Kuwait, China, and Africa. We offer only an undergraduate program and 

B.S. degree in petroleum engineering at Marietta College and we are the only small, 

private liberal arts college in the nation to offer this unique major. This year I have 

had over 20 companies on campus recruiting my seniors for permanent jobs and my 

underclassmen for summer internships. Our graduates are in high demand. 

The manpower demand won’t stop with just engineers and geologists however. I 

have been working closely with Washington State Community College and the 

Washington County Career Center in an effort to help them prepare curricula that 

will educate and train technicians and field personnel that the industry will require 

going forward. Several other technical colleges around the state are also preparing 

74 

tracts of study for their students that will prepare them for jobs in our industry as 

well. 

I have been teaching courses in natural gas engineering for 37 years. My masters 

and PhD research were focused on gas storage operations and producing methane 

from coal, respectively. I have had research contracts with the Department of Energy and the Gas Research Institute in Chicago, with all of my research being focused on natural gas engineering topics. I was, in fact, way ahead of my time with 

my research focused on gas production from coal seams and the Devonian shale formation back in the mid-1970’s. While we knew we had vast resources of natural gas 

in coal and shale back in the ‘70’s, we just did not have the technology necessary 

to free that resource from the very low permeability (or tight) reservoir rocks. The 

natural gas trapped in those rocks was uneconomical to recover because technology 

had not been developed to get that gas out of the rock formations. 

But things have changed dramatically in the U.S. just in the last ten years. Advances in horizontal drilling that had been traditionally employed mainly in offshore 

environments and multi-stage fracturing have opened up vast untapped resources 

of natural gas and oil in shale formations such as the Marcellus and Utica-Point 

Pleasant shales. 

A study recently released by the U.S. Energy Information Agency revised the 

unproved technically recoverable reserves of natural gas in the Marcellus shale 

down to 141 Tcf of gas. The 42% downward revision still means that the Marcellus 

has the potential to meet the nation’s entire natural gas needs for seven years. Just 

fifteen or so years ago, the nation boasted total proven recoverable natural gas reserves of only 200 Tcf. Now one formation alone in the backyard of Appalachia 

boasts approximately the same. 

The Utica shale is in its infancy of development and its recoverable reserve potential cannot yet be estimated with any accuracy, but one thing is known—some of 

America’s largest oil and gas companies have wagered several billion dollars and 

placed it in the hands of landowners. Companies have leased nearly 4 million acres 

of land in Ohio with the expectation of producing both gas and especially oil in commercial quantities. 

The relatively low current price for natural gas is obviously great for consumers, but makes it difficult for companies to justify spending $5–6 million dollars to drill 

and complete gas wells. Consequently, companies have focused their attention on 

other shale formations like the Eagle Ford, Niobrara, Bakken, and now the Utica 

that produce oil along with natural gas. 

The nearly 4 million acres of land that have been leased in Ohio potentially represent 25,000 horizontal wells that could be drilled in the state for a total investment of nearly $125 billion over the next 20 to 25 years. It is estimated that the 

number of horizontal wells drilled will rise from 11 last year to over 130 this year 

and over 1,000 a year by 2013 if the resource potential proves true. The surge in 

drilling activity should result in a significant drop in the unemployment rate in 

Ohio thanks to the creation of good paying jobs in the petroleum industry and all 

areas that support it. Job growth across all sectors will likely come in between 

65,000 and 200,000 by the year 2014 as estimated by recent economic impact studies supported by the Ohio Chamber of Commerce and the Ohio Oil and Gas Association Energy Education Program. 

Thanks to our newfound ability to extract oil and gas from shale, U.S. and Canadian oil production is expected to grow by more than 3.1 million barrels per day 

(BPD), reaching 12.1 million BPD and surpassing the record of 11.2 million BPD 

set in 1973, according to BENTEK Energy LLC. U.S. imports of foreign oil will fall 

more than 40% by 2016 according to their study. 

The Boone Pickens’ Plan for conversion of our nation’s truck fleet to natural gas 

along with the construction of more natural gas-burning power plants have the potential to reduce green house gas emissions significantly and take advantage of the 

cheapest and the second most abundant fossil fuel, next to coal, in the nation. America has the potential to reduce its imports of foreign oil even more if it institutes 

a plan like Pickens’. With our abundant sources of natural gas, we could even become a net energy exporter. 

Along with the development of our shale resources comes the necessity to care for 

the environment. Thanks to movies like Gas Land that are rooted more in fiction 

than fact, the public has been polarized against the process of hydraulic fracturing 

which is an absolute necessity in the process of extracting gas and oil from tight 

shale formations. Over a million wells have been fraced in the U.S. since the late 

1940’s, and over 60,000 wells in Ohio alone. There are no data to substantiate the 

claims made in Gas Land that hydraulic fracturing contaminates groundwater. In 

fact, a recent study released by the University of Texas affirms the fact that fracing 

does not contaminate groundwater. 

75 

In another technical paper published by George E. King of Apache Corporation 

through the Society of Petroleum Engineers, King estimates, in a worst case scenario, that the odds of a hydraulic fracture treatment in a formation less than 2,000 

ft deep penetrating a fault that extends back to the surface at 1 in 200,000. He estimates the chance of this happening in a stratum deeper than 2,000 feet as being 

zero. 

The key to ensuring that there is no contamination of the ground water lies in 

proper well construction. Multiple strings of casing properly cemented back to the 

surface can and do eliminate the possibility of frac water from entering fresh water 

aquifers. Most, if not all, of the companies drilling wells in Ohio exceed Ohio regulations with regard to well construction and cementing practices. A typical well diagram is shown as Attachment 1 to this testimony. In the diagram, it can be seen 

that there are actually four strings of casing and two layers of cement protecting 

the fresh water aquifer. And with the depth of the wells at 6,000 to as much as 

9,000 ft, the odds of an induced hydraulic fracture growing back to the surface are 

essentially zero. 

Oil and gas companies, the Department of Natural Resources, the EPA and other 

related agencies must cooperate to ensure that well design, construction and cementing procedures ensure that the public water supply is protected. At the same 

time, the public must be informed of the actions taken by these groups to protect 

the water supply so that fear is not allowed to be spread by groups that believe 

America’s energy shouldn’t come from their backyard. 

In the United States today we have an opportunity at hand to significantly lessen 

our dependence on foreign oil while growing our economy with good paying jobs. We 

can develop our vast oil and gas resources in the shale while simultaneously protecting the environment if all entities involved, both on the extraction side and the 

environmental side, work together and not in juxtaposition to each other. 

Thank you again for giving me the opportunity to appear here today. I’ll be happy 

to answer any questions you might have. 

76 

Mr. LAMBORN. OK. Thank you. 

Ms. Hughes? 

STATEMENT OF CHRISTINE HUGHES, OWNER, VILLAGE 

BAKERY AND CAFE, DELLA ZONA RESTAURANT, CATALYST 

CAFE BAKERY 

Ms. HUGHES. Thank you. My name is Christine Hughes. My 

partner and I own three food businesses including Della Zona, 

which means from the region. 

For ten years we have made food from locally grown ingredients 

to sell and feed to our staff of 25. I am concerned that shale drilling 

is moving into land surrounding the city because that is where our 

food is grown and that is where my farming friends make their living, from the land. 


73226.004.eps
77 

We buy from over 30 local food producers. At least 70 jobs are 

directly affected by my business. Dozens more local food producers 

sell at the nationally renowned Atkins Farmers Market. 

Our tourism bureau created Atkins 30-Mile Meal Project to increase local food use and promote tourism. The 147 partners include farms, restaurants and farmers markets. We are a national 

resource for regions seeking to develop and build their local food 

economy. Today we have laid the foundation for our sustainable 

economy by creating a resilient local food system, but this year 

shale drilling has been escorted onto our land against our will. 

In Athens County several hundreds of oil and gas leases are 

under contract to be drilled. We have Class II injection wells, and 

the volume of fracking wastewater trucked in and injected under 

our land will increase exponentially. Awareness is growing here 

about the health effects of living near shale drilling. Last month 

the American Lung Association stated, ‘‘We believe there is a very 

real and unacceptable risk that the air emissions will make people 

sick and shorten the lives of those living in communities where the 

extraction will take place.’’ The speed and forcefulness of shale development impels us to protect ourselves. 

In Athens we have conducted extensive baseline water testing results. Our chapter of Ohio Ecological Food and Farming Association 

passed a resolution opposing horizontal fracking. Patriotic Ohioans 

are asking why landowners who don’t want drilling are subject to 

it through eminent domain by multinational companies who sell 

our oil and gas to other countries. No one has done a study to find 

out the economic impact of devastating this local food economy, 

taking away the livelihood of the 70 people my business relies on 

and shutting down the small farms that serve hundreds of people 

connected in this way. We don’t want to lose our jobs. 

Three percent of the households in my county have signed leases 

that will allow drilling activity on half the land in our county. None 

of my suppliers have signed, but many are surrounded by land that 

is leased. 

Ohio University and all other public land is also available to drill 

on including Wayne National Forest. Civic leaders spoke in opposition to shale drilling being permitted in the Wayne. The risk to our 

water supply, community health and local economy could not be 

supported. The drilling company that got Athens landowners to 

sign was dishonest with lessors telling them they do not use chemicals to frack. Shareholders of oil and gas companies are treated 

with more respect and honesty than the landowners are. Shareholders are required to be told the risks of drilling while the lessor 

is not. 

The failure to oversee drilling on public land and the absence of 

punitive fines for violators give us no confidence that the farmers’ 

health and environment will be protected. Local farmers tell me 

about their concerns. Integration Acres raises 50 milking goats on 

a 30-acre pasture. Their neighbor signed a lease for fracking and 

is eager to host a compressive station at the far end of his property. 

Lynn Scott’s third generation farmers are struck with grief that 

their neighbors have signed. More than one local lease signer has 

said, ‘‘If the drilling gets bad, I can take the money and move to 

Florida.’’ The family next door will live with the effects. Angie 

78 

Starline tells us ‘‘I am not interested in feeding our customers food 

from a contaminated industrial zone.’’ Their investment will be lost 

if they must abandon their land. ‘‘We do not want to lease our land 

for the Utica shale’’ says Neil Cherry, Cherry Orchards. His neighbors have leased. ‘‘How will we be able to pass our family farm 

onto our children?’’ 

Neighbors are now pitted against each other each standing by his 

right to earn a living from his land. 

I cannot imagine a better plan to rip apart a close community 

than this oil and gas rush. The jobs displaced by drilling are not 

accounted for, not even mentioned. Sustainable small scale farm 

businesses already supported by the people of Southeast Ohio and 

our success can be duplicated across the state and country to increase our security and reduce our need for fossil fuels. 

In sustainable food producing regions, the largest buyers of local 

food have written that they will not purchase food from land surrounded by industrial production for oil and gas. What will happen 

to Ohio’s farmers? Who will grow our food? These farmers I work 

with are practical visionaries who have built a strong food economy 

for 40 years. 

I testify today to protect my friends and our livelihoods from 

being destroyed. Protecting farmland from fracking is vital for a 

productive economy now and after fossil fuels are history. Thank 

you. 

[The prepared statement of Ms. Hughes follows:] 

Statement of Christine T. Hughes, Owner of Village Bakery, 

Della Zona, and Catalyst Cafe ́

Distinguished members of the committee: 

Thank you for convening this hearing on a topic that is of urgent concern to all 

Ohioans. I would like to present a business perspective in the hope that it may illustrate how shale development is currently impacting my business network in Athens, 

Ohio. 

My name is Christine Hughes. My partner and I own 3 food businesses in Athens—Village Bakery, Catalyst Cafe ́, and Della Zona—which means ‘‘from the region’’ 

in Italian. We currently have 25 employees. We make food from locally grown ingredients to sell to our neighbors, to Athens visitors, and to feed our staff. I’ve been 

concerned for some time now about the shale drilling industry moving in to land 

surrounding the city, because that’s where our food is grown, and that’s where my 

farming friends make their living. 

I want to briefly tell you about some of the people I’ve done business with for 

more than 10 years. Some of the checks I write over the course of the week are for: 

High Bottom Farm eggs, 

Laurel Valley Creamery cheese, 

King Family Farm poultry, 

Harmony Hollow Farm pork, 

Sassafras Farm spinach, 

Shagbark Seed and Mill corn, 

Cherry and Shews Orchards fruit, 

Cantrell honey, 

Shade River Farm onions, 

Rich Gardens garlic, 

Green Edge Gardens lettuce, 

Starline Organics flour, 

Snowville Creamery milk, 

Sticky Pete’s maple syrup, 

and several other local food producers. And this is in February. 

These checks represent real local businesses, most with additional employees—the 

larger ones have 12–15 full time employees. At least 70 jobs are directly affected 

by my business. 

79 

There are many dozens more local food producers at the thriving Athens Farmers 

Market, which is nationally known, and has a 2-year waiting list for vendors. 

Some of our local producers have grown to be able to sell to Giant Eagle and 

Whole Foods, in larger cities including Columbus and Washington DC. 

These farmers and producers raise food in a way that ensures that future generations will also be able to produce clean, healthy food. And they teach younger generations how to farm, and how to produce food for their families and communities. 

Two years ago the Athens 30 Mile Meal Project began, to increase local food use 

and promote tourism around local food. This year there are 147 partners in the program (up 68% since August 2011) including farms, CSAs, eateries committed to local 

sourcing, specialty food producers, and farmers markets. 

This year 30 MM will become a national resource for regions seeking to develop 

and build their local foods economies, promoting the region to travelers interested 

in experiencing our vibrant local foods experience, resulting in additional demand 

for hotel rooms, meals, as well as lodging tax revenues. 

Together, we have laid the foundation for a sustainable economy by creating a resilient local food system. Resilient, unless, of course, a toxic, poorly regulated industry, funded by unprecedented international speculative investment is escorted into 

our land, against our will. Small-scale agriculture in Southeast Ohio is about to be 

terminated by a short-term energy ‘‘boom’’ that is being forced on citizens, 72 percent of whom, despite their hopefulness about economic benefits, want shale drilling 

stopped until further studies can be completed on it’s potential impacts. 

So far in Athens County there have been no wells drilled yet for this new kind 

of high volume, deep shale, slick water, horizontal fracturing, but several hundred 

oil and gas leases are under contract to be drilled, beginning this spring according 

to one drilling company. We do have 4 class 2 injection wells, 2 of which are actively 

receiving truckloads of waste water from frack jobs in PA, WV, and North of us in 

Ohio. One of these is just outside Athens City and close to the Hocking River. With 

the increase of shale drilling endorsed by our State and Federal governments, Ohio 

can expect to see the volume of fracking waste water trucked in and injected under 

our land to increase exponentially. 

Awareness is growing here about the health effects of living near shale drilling 

operations. A statement last month from the American Lung Association regarding 

shale development in New York is one that should apply to Ohio as well. The statement reads in part: ‘‘We believe that there is a very real and unacceptable risk that 

the air emissions will make people sick and shorten the lives of those living in the 

communities where the extraction will take place.’’ The speed and forcefulness of 

shale development has sparked a growing movement to prevent damage from drilling. 

In Athens County, watershed scientists, landowners and dozens of volunteers are 

working together with an EPA certified lab to gather extensive baseline water testing results. Our local chapter of Ohio Ecological Food and Farming Association has 

unanimously passed a resolution opposing horizontal fracking because they ‘‘believe 

it is imperative to maintain and expand our local food economy that is energy efficient and ecologically responsible.’’ Patriotic Ohioans are asking why local control 

has been stolen from us, and why landowners who don’t want the drilling are subjected to it anyway through eminent domain—by multinational companies who are 

selling the oil and gas to other countries! 

Ohioans want to work, and those who are working in our vibrant local food system don’t want to lose our jobs. No one has done a study to find out the economic 

impact of devastating this local food economy: taking away the livelihood of the 70 

people my business relies on and shutting down the small farms that serve hundreds of people connected in this web. 

Shale drilling and the disposal of its waste products are an imminent threat to 

my livelihood and others who make a living from using our environment responsibly 

to feed ourselves. Three percent of the households in my county have signed leases 

that will allow drilling activity on over 50 percent of the land in our county. None 

of my suppliers have signed a lease, but many are surrounded by land that is 

leased. Ohio University and all other public land is also available to drill on, including Ohio’s only federal forest land, which is Wayne National Forest. Civic leaders 

and officials, alerted by a citizen to the BLM auction at the last minute, spoke clearly in opposition to shale drilling being permitted in the Wayne, on public land, because of the risk to aquifers that supply the City of Athens. The ‘‘risk to our water 

supply, community health and local economy’’ from a practice that is ‘‘not strictly 

regulated and highly accountable’’ could not be supported by the Athens Wellhead 

Protection team. 

The company that got all the local landowners to sign was dishonest with potential lessors, telling them they do not use chemicals to frack, and that they filter the 

80 

flowback water to put it back into the drinking supply. They offered tiny per-acre 

sums to naı ̈ve landowners though the value of the minerals was already in the thousands. Landowners who resisted signing were told by their neighbors that if they 

didn’t sign, the company would drill under their property horizontally to extract 

minerals from them. Shareholders of oil and gas companies are treated with more 

respect and honesty than the landowners are—the shareholders are required to be 

told the risks of drilling, while the lessor is not. 

Citizen concerns about safety and health have not been fully addressed by authorities. The failure to oversee drilling on public lands, and the absence of punitive 

fines for violators does not give me confidence that our farmers’ health and environment will be protected from the industry’s activities. In Ohio, regulations for wellsiting and gas flaring for farming areas are weaker than for urban areas. 

As the industry gets ready to move forward, many local farmers are trying to figure out what they will do. A handful of examples might give you an idea of their 

dilemma: 

Integration Acres is run by a young family who raise 50 milking does for cheesemaking on a 30 acre pasture. Their neighbor, a wealthy excavator with lots of acreage, has signed a lease for fracking and is eager to place the compressor station at 

the far end of his property, next to another neighbor who lives on a tiny strip of 

land in a dilapidated trailer. 

‘‘We do not want to lease our land for the Utica Shale,’’ says Neil Cherry 

of Cherry Orchards, whose neighbors have leased to drillers. ‘‘How will we 

be able to pass our family farm to our children? What should we do now 

to protect our family and our land?’’ 

Kale and Melanie Linscott, a young, hardworking couple who grow organic vegetables on land that’s been in the Linscott family for generations, are struck with grief 

that their neighbors who own land but do not farm have signed. More than one local 

lease signer has said, ‘‘if the drilling gets bad, I can take the money and move to 

Florida.’’ That leaves the family next door to live with the effects of drilling. 

Angie Starline, of Starline Organics, whose farm is adjacent to the Hocking River, 

and next to an active class II injection well receiving frack waste water, tells us, 

‘‘I am not interested in feeding our customers food from a contaminated industrial 

zone.’’ She and her husband have invested a lot in their farm, money that they will 

not be able to recoup if they must abandon their land. 

Neighbors, even relatives, who have peacefully coexisted for years are now pitted 

against each other, each standing by his right to earn a living from his land. I cannot imagine a better plan to rip apart a close community than this oil and gas rush, 

as it is affects our farmers and customers. 

This is a massive transfer of wealth—the wealth of our air, our land, our water, 

our infrastructure of interdependent small businesses. All these are being sacrificed, 

not for the good of our country, not for the well being of the people, but to ensure 

the profit of a few multinational corporations. Every citizen prefers clean air to 

breathe and clean water to drink. And most of us want jobs that preserve the highest health and environmental standards for all. We need Local, State, and National 

leaders who have both the will and the authority to uphold these standards. 

No, this is not about reducing our dependence on foreign oil, creating permanent 

jobs, or making ourselves safe. The climate change denialists are hand in hand with 

politicians who tell us wars in the Middle East are not about oil, and then in the 

next breath that extracting that last drop of oil from under our land will keep us 

from war, make us independent, and keep our energy costs low. The jobs displaced 

by drilling are not accounted for, not even mentioned in the promise of Ohio’s fossilfuel-funded future. 

If you, our elected representatives, are truly interested in securing long-term jobs 

and energy supplies for the future of our country, then please put these several facts 

on the same page for a minute: Deep shale hydraulic fracturing in the U.S. could 

provide our energy for up to 100 years. According to research out this month from 

National Oceanic and Atmospheric Administration, methane leaking from fracking 

gas fields is far greater (from 2.3–7.7%) than previously reported (1.6%). Methane 

contributes to increased temperatures on Earth—that includes our country, by the 

way. The International Energy Agency’s latest report projects that 2017 will be the 

year we surpass the level of global warming safety. 2017—five years from today, at 

current levels of fossil fuel use. At the end of 2011, the U.S. Department of Energy 

reported that levels of greenhouse gasses are higher than the worst-case scenario 

anticipated just four years ago. 

From what science and reality are showing us, our whole planet will be cooked 

long before that century of shale fuel can be used up. So, yes, fracking can fuel our 

future—as long as we don’t mind measuring our future in seasons rather than in 

decades. 

81 

For jobs that can last more than a decade, that can help us rebuild our economy, 

sustainable small-scale farming, smart building and retrofitting, low-impact tourism 

and renewable energy are all worthy of your support. These are the businesses that 

already support the people of Southeast Ohio, and their success can be duplicated 

across the country, increasing our security by lessening our need for fossil fuels. 

Where fracking has threatened to move in, in other sustainable food-producing regions such as New York, the largest buyers of local food have written statements 

that they will not purchase food from land surrounded by industrial production of 

oil and gas. What will happen to Ohio’s farmers? Who will grow our food? 

These people I describe, with businesses they give their lives to, are practical visionaries who have built a sustainable food system over the last 40 years, with the 

knowledge that fossil fuels would not last forever. I will do everything in my power 

to protect my friends and our livelihoods from being destroyed. What will you do 

to help us? If we do not protect our farmland from fracking, we will eliminate the 

very infrastructure that can survive and the very teachers that will help us all learn 

to thrive after this brief era of fossil fuel burning is history. 

Mr. LAMBORN. OK. Thank you. 

Mr. Johnson? 

STATEMENT OF NATHAN JOHNSON, STAFF ATTORNEY, 

BUCKEYE FOREST COUNCIL 

Mr. NATHAN JOHNSON. Chairman Lamborn, Mr. Johnson and 

Mr. Thompson, thank you and good morning. 

My name is Nathan Johnson. I am a staff attorney for the Buckeye Forest Council. We are a 501(c)(3) public interest group. The 

Buckeye Forest Council is a membership-based grassroots organization dedicated to protecting Ohio’s native forests and their inhabitants. I am here today to remark on the need for adequate analysis of deep shale development of Ohio’s public lands and for adequate health and environmental safety standards regarding the 

same. 

Ohioans want jobs, but we want healthy families and a clean environment, too. There is nothing incompatible about jobs and adequate protection. Unfortunately though we do not have adequate 

protection at this time in Ohio. Ohio currently lacks adequate 

health and safety standards to protect the public and their land 

from potential water, soil and air pollution generated by a rapidly 

growing shale industry in the state. 

For example, Ohio law does not require any predrilling water 

testing or water monitoring of monitor wells in rural areas prior 

to drilling. Ohio law allows shale gas drilling sites to store toxic 

wastewater in open pits with no fencing. These pits attract and kill 

wildlife including large numbers of bats and birds. In fact, in 2010 

one of these open air storage pit leaked and spilled 1.5 million gallons of toxic oil and gas wastewater onto land in Ohio. Nothing in 

Ohio law prevents the burial of contaminated drill cuttings on site. 

Ohio law allows highly toxic oil and gas field waste to be spread 

on community roads for dust and ice control. 

Ohio is seventh in the Nation in population, but a mere 47th in 

public land available per capita. The Wayne National Forest, of 

which large portions are located in Athens County, is Ohio’s only 

national forest. This past October the Buckeye Forest Council formally protested the Bureau of Land Management’s proposed lease 

sale of 3,302 acres in the Wayne National Forest for oil and gas 

drilling. Joining us in the protest of the sale were the Athens City 

Council, Athens City Government, Athens County commissioners, 

82 

Ohio University, the Burr Oak Regional Water District, several 

other organizations and many local residents. A copy of BFC’s formal protest has been submitted to the Subcommittee. 

From Buckeye Forest Council’s perspective, the reasons for a formal protest were simple. Some of the flaws in Ohio’s regulatory 

structure have already been noted. Moreover, the Forest Service 

and the BLM would have violated Federal law had the sale proceeded. Federal law requires that both Forest Service and BLM 

rely upon up-to-date environmental impact analyses prior to proceeding with an oil and gas lease sale on Forest Service land. However, neither the Forest Service nor BLM had given any consideration to the potential impacts that high volume horizontal hydraulic shale development could have on the land. 

In fact, in 2006, the forest plan which was relied upon by the 

Forest Service and BLM specifically mentioned that hydraulic directional drilling was not considered economical at the time. So 

none of the environmental analyses had actually considered it certainly up until this point. The need for updated analysis was, 

therefore, plainly necessary, as shale drilling comes with a much 

larger footprint than conventional forms of oil and gas extraction; 

larger drilling pads, considerably more truck traffic and exponentially more fresh water use and wastewater generation. The significance of these new developments require an environmental impact 

statement. 

Subsequent to the submission of protest, the Forest Service recognized that high volume horizontal shale development had never 

been considered or analyzed for the Wayne. Forest Service withdrew the consent it had given BLM to proceed with the sale based 

on that fact. The Forest Service is currently undertaking review of 

new information, as was stated earlier today, relating to the positive and negative impacts of shale development in the Wayne. 

The need for compliance with Federal law and the weaknesses of 

Ohio state law necessitated the lease sale cancellation. However, 

improving Ohio’s oil and gas safety standards should be low hanging fruit for the Ohio general assembly. Jobs and adequate safety 

standards are not mutually exclusive. Improved safety and environmental requirements will be easily absorbed by the industry and 

in many cases should save the industry significant sums of money. 

One thing that U.S. Congress should consider is the Federal Resource Conservation Recovery Act or RCRA. As I mentioned earlier, 

Ohio does allow fracking or oil and gas wastewater brine to be 

sprayed on local roads, and as many of us know, the wastewater 

can be highly toxic. But were Congress to decide to, I guess, close 

the exemption for oil and gas drilling in RCRA, which would basically classify brines as hazardous waste, then we would be talking 

about Class I injection wells for disposal instead of Class II. We 

would have better monitoring, and we would no longer have any 

brine spraying on our roads. Thank you. 

[The prepared statement of Mr. Johnson follows:] 

Statement of Nathan Johnson, Staff Attorney, Buckeye Forest Council 

Chairman Lamborn, Ranking Member Holt, and Members of the Subcommittee, 

thank you and good morning. 

My name is Nathan Johnson. I am the staff attorney for the Buckeye Forest 

Council, a 501(c)(3) public interest organization. I speak on behalf of Buckeye Forest 

83 

Council today. The Buckeye Forest Council (BFC) is a membership-based, grassroots 

organization dedicated to protecting Ohio’s native forests and their inhabitants. We 

seek to instill in Ohioans a sense of personal connection to and responsibility for 

Ohio’s native forests and to challenge the exploitation of land, wildlife and people. 

I am here today to remark on the need for adequate analysis of deep shale development on Ohio’s public lands and for adequate health and environmental safety 

standards regarding the same. Ohioans want jobs, but we want healthy families and 

a clean environment, too. There is nothing incompatible about jobs and adequate 

protection. 

However, Ohio currently lacks adequate health and safety standards to protect 

the public and our land from the potential water, soil, and air pollution generated 

by a rapidly growing shale industry in the state. For example, Ohio law does not 

require any pre-drilling water testing or water monitoring requirements in rural 

areas. Ohio law allows shale gas drilling sites to store toxic wastewater in open pits 

with no fencing. These pits attract and kill wildlife, including large numbers of bats 

and birds. Nothing in Ohio law prevents the burial of contaminated drill cuttings 

on site, and Ohio law allows highly toxic oil and gas field waste to be spread on 

community roads for dust and ice control. 

Ohio is 7th in the nation in population, but a mere 47th in public lands available 

per capita. The Wayne National Forest, of which large portions are located in Athens County, is Ohio’s only national forest. This past October, BFC formally protested the Bureau of Land Management’s proposed lease sale of 3,302 acres of the 

Wayne National Forest for oil and gas drilling. Joining us in protest of the sale were 

Athens City Council, Athens City Government, Athens County Commissioners, Ohio 

University, the Burr Oak Regional Water District, and several concerned organizations and local residents. A copy of BFC’s formal protest has been submitted to the 

Subcommittee. 

From BFC’s perspective, the reasons for the protest were simple. Some of the 

flaws in Ohio’s regulatory structure have already been noted. Moreover, the Forest 

Service and the BLM would have violated federal law had the sale proceeded. Federal law requires that both Forest Service and BLM rely upon up-to-date environmental impact analyses prior to proceeding with an oil and gas lease sale on Forest 

Service land. However, neither Forest Service nor BLM had given any consideration 

to the potential impacts that high volume horizontal hydraulic shale development 

could have on the Wayne. In fact, the 2006 environmental review documents that 

Forest Service and BLM relied upon as justification for the proposed sale expressly 

stated that horizontal drilling was not considered because it was deemed economically infeasible for the Wayne at the time. The need for updated analysis was therefore plainly necessary, as shale drilling comes with a much larger footprint than 

conventional forms of oil and gas extraction: larger drilling pads, considerably more 

truck traffic, and exponentially more freshwater use and wastewater generation, etc. 

Subsequent to the submission of protests, the Forest Service recognized that high 

volume horizontal shale development had never been considered or analyzed for the 

Wayne. Forest Service withdrew the consent it had given to BLM to proceed with 

the sale based on that fact. The Forest Service is currently undertaking a review 

of new information relating to the potential positive and negative impacts of shale 

development on the Wayne. 

The need for compliance with federal law and the weaknesses of Ohio state law 

necessitated the lease sale cancellation. However, improving Ohio’s oil and gas safety standards should be low-hanging fruit for the Ohio General Assembly. Jobs and 

adequate safety standards are not mutually exclusive. Improved safety and environmental requirements would be easily absorbed by the industry, and in many cases 

should save the industry significant sums of money. 

Lastly, some additional context regarding shale industry jobs potential in Ohio is 

warranted. While the shale industry is likely to generate new jobs for Ohio, the jobs 

figures projected by industry are grossly inflated. Industry commonly touts some 

200,000 new Ohio jobs. However, Ohio State University researchers recently found 

that such figures are deeply flawed, and that a figure close to 20,000 total new jobs 

(both directly and indirectly created) is far more likely. Moreover, the 20,000 jobs 

figure does not take into account potential losses the tourism sector—a much larger 

employer than oil and gas—may incur as a result of oil and gas development. 

Thank you. 

Mr. LAMBORN. OK. Thank you all for being here. I am going to 

hand the gavel to Representative Thompson. 

84 

Mr. THOMPSON. [Presiding.] Thank you, Chairman. I will take 

the liberty of starting my 5 minutes. I think we will be doing one 

less round of questioning. 

Dr. Chase, it is very nice to meet you. You unfortunately support 

my theory in Pennsylvania that we export our best and our brightest. It is very nice to meet you. I have some questions for you. 

One of the claims I hear is that nobody has really looked at the 

impact of horizontal drilling. Is that true? If it is not, who has 

looked at the impact of environmental drilling on the environment 

and on people? 

Dr. CHASE. A lot of people have looked at it. We have been using 

horizontal drilling offshore in the Gulf of Mexico for almost 50 

years. We have fixed platforms out there and usually put a template on the ocean floor. We have to drill down and then outward 

to exploit the reservoirs we have out there because you can’t move 

those fixed platforms around very easily. 

On shore horizontal drilling started down in the Barnett Shale 

in Texas about ten years ago, and it was only after drilling a lot 

of vertical wells in very narrow short spacings, similar to the way 

we have drilled wells in Ohio here for the last hundred years, that 

companies discovered that by drilling down and out horizontally, 

they can actually minimize the impact on the environment. 

Here in Ohio I was struck by some of the comments by Ms. 

Hughes here. Over in the Athens area, which I am very familiar 

with, you just drive along the highway and you see small wells in 

the fields because they have been drilled for the last 50 years, especially since 1985, on 20-acre and 40-acre spacings. That means that 

every 20 acres or every 40 acres, we have put in a pad. We have 

set casing, and we have producing wells. 

With the advent with horizontal drilling, we are able to take a 

640-acre tract, which is the equivalent of a whole township, and 

put one small pad in the center of that 4 to 5 acres versus 2 to 3 

acres every 40 acres. So we are replacing 16 well sites with one 

well site. And we can drill six horizontal wells from that well site 

that exploit the entire amount of acreage. There is much, much less 

road traffic. The roads are centralized. Pipelines are centralized. 

Overall, it is very beneficial to the environment. 

Studies have been done on that down in Texas. Out in Arkansas 

they have similar development going on in the Fayetteville shale, 

and down in the Eagle Ford shale down in Texas they are going 

through the same process now. So it is effective. 

Mr. THOMPSON. Thank you. 

Mr. Looman, I am making an assumption that this part of Ohio 

is similar to the part of Pennsylvania I represent, that our number 

one export has been our young people. I take that as a yes. That 

is unfortunate. 

Has natural gas opportunity made or will it make a difference 

in stopping the loss high school graduates? 

Mr. LOOMAN. I think it certainly has that opportunity. As Congressman Johnson mentioned earlier, the ABC News story that 

proclaimed us as the next boom town, the story is a little premature, but what that led to was a huge amount of calls coming 

into our office and the county Chamber of Commerce office from 

young people who had moved away and desperately want to come 

85 

back and were asking about the opportunities that this industry 

will bring in order for them to come back. 

So I think the answer to your question, there is a strong possibility that can happen. 

Mr. THOMPSON. Are you seeing opportunities with business, both 

service or manufacturing, that are not directly related to the natural gas industry? 

Mr. LOOMAN. Yes. The supply chain is huge for us. Industries in 

town or businesses in town that are involved in some sort of opportunity that may be able to link to that industry, as Mr. Heller was 

talking about his type of business, we have seen that already happen here where local businesses are starting to gain large amounts 

of revenue from these companies. 

Mr. THOMPSON. Our hotels and restaurants are just—— 

Mr. LOOMAN. I want to thank you for inviting Mr. Heller, too, because I think we have a new prospect for Jefferson County. 

Mr. THOMPSON. Mr. Heller, with that said, you talked about 120 

employees directly attributable to natural gas energy development. 

Do road builders use the equipment sold by your members? 

Mr. HELLER. Yes. 

Mr. THOMPSON. Are you aware of any increase in road construction or improvements using this equipment in areas producing natural gas? 

Mr. HELLER. Yes. The energy companies that own the sites or 

are developing the sites are actually improving the roads for truck 

traffic that they create. And if there is any damage to the road, I 

am sure you have seen it yourself being from Pennsylvania also, 

the roads are left in better condition when they are done than before they came in. So it is been a real benefit to the local communities in northern Pennsylvania where I travel. 

Mr. THOMPSON. Thank you. 

Mr. Chairman? 

Mr. LAMBORN. [Presiding.] Thank you. 

Mr. Johnson? 

Mr. JOHNSON OF OHIO. Thank you, Mr. Chairman. 

Dr. Chase, in your testimony you talk about the high demand for 

your graduates that is being experienced right now because of the 

development of the Marcellus and the Utica. How much on the average do these recent graduates make per year with these new opportunities? 

Dr. CHASE. Average salary this year is about $95,000 with signing bonuses of $10,000 to $15,000 a year on top of that. 

Mr. JOHNSON OF OHIO. Those young people aren’t going out of 

state, are they? 

Dr. CHASE. Well, actually still most of my students are leaving. 

Mr. JOHNSON OF OHIO. Are they? 

Dr. CHASE. Yes. I think the Utica, impact of the Utica has not 

hit home here yet. I have quite a few students that have gone to 

work in the Marcellus, but by far and away, my students go south 

to the Gulf of Mexico, to the Rockies, to California. 

Mr. JOHNSON OF OHIO. All the more reason why we need to see 

this opportunity to keep these young people at home. Have you experienced an uptick in prospective students applying to your deVerDate Nov 24 2008 09:38 Mar 13, 2013 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6602 L:\DOCS\73226.TXT Hresour1 PsN: KATHY
86 

partment, and do you have any plans to expand your undergraduate program? 

Dr. CHASE. Yes. We have had a significant uptick. So far this 

year we have had probably close to 200 applications for admission. 

We expanded our incoming class from 75 students to 90 students 

this year. But already we have had 75 acceptances. So we are looking at there is room for just 15 more students. And 155 actually 

have been accepted to Marietta College. So we are almost at capacity now. 

Mr. JOHNSON OF OHIO. You have testified as an expert, so to 

speak, on several panels that I have witnessed. Do you feel that 

the State of Ohio is doing a good job regulating hydraulic fracturing and do you think a one size fits all approach that is being 

advocated by the EPA is valid? 

Dr. CHASE. I am against the Federal Government taking over 

these operations. I think that the Ohio EPA and our Department 

of Natural Resources have been working very well, together. I 

think that Senate Bill 165 that was put in place several years ago 

has done more to ensure the protection of our environment and our 

groundwater than any piece of legislation that I have seen in the 

neighboring states. I would say Pennsylvania, Mr. Thompson’s 

state, West Virginia, it would be wise if they considered adopting 

the same kind of plans that we have here. 

I can tell you also that I talk with a lot of the companies that 

are drilling wells here in this state, and they don’t only just meet 

the requirements that we have set forth in Ohio law and regulations. Their goal is to exceed them. The last thing that they want 

is something to happen like we saw happen in the Gulf of Mexico, 

which of course, that was a well construction failure issue also. 

So well construction is the key to successfully doing all of this. 

It is the key to making sure that hydraulic fracturing is safe. There 

is a lot of education that has to go on. It is the public and the corporations that have to step up and contribute to that education. 

Mr. JOHNSON OF OHIO. Thank you, Dr. Chase. You add a great 

deal of credibility to the analysis we are doing, and I appreciate 

your testimony here today. 

Mr. Looman, in your testimony you alluded to the struggles that 

this area has seen, the steel industry leaving, manufacturing leaving. Can you talk about the hope that the people of Jefferson County now are sensing because of the oil and gas development going 

on right here and that is expected to come in the future? 

Mr. LOOMAN. Well, there is obviously great excitement. I think 

it is also a sense of we are ready for it, where is it. When, again, 

the ABC News story came out, we all thought it was here. It is not 

here yet. It is getting here, and it is coming slowly. But I think 

there is a huge amount of excitement, not just the first wave, the 

first wave being petroleum, but then what comes next. 

You talked earlier about the cracker facility, should that go anywhere in this area. That is going to lead to so many opportunities 

for us going forward. So I think there is a huge amount of excitement about what is coming now and what is coming in the future 

and how we can take advantage of it, particularly from a job creation standpoint. 

Mr. JOHNSON OF OHIO. Thank you very much. 

87 

Mr. Chairman, I am almost out of time here, but I am going to 

close out my questioning by again thanking these panel members 

for coming and reasserting two things that I said earlier, one, making sure that these opportunities are coming to Ohioans and that 

Ohioans are the ones getting the work and the opportunities, and 

as Dr. Chase said, that our young people are able to stay here at 

home and also that our landowners are protected, that they are not 

required to give up their rights. And I would like to know what 

those things are actually happening. 

So please reach out and contact my office. We want to know. 

Again, I am not a no-regulation person, but I think where public 

safety, public health and national security are a concern, valid concern, we need common sense regulations, but our regulations need 

to be based on fact and scientific analysis, not on scare tactics. 

With that, I yield. 

Mr. LAMBORN. OK. Thank you. Mr. Heller, you said that you sell 

heavy equipment in Pennsylvania and New York? 

Mr. HELLER. Correct. 

Mr. LAMBORN. Have you noticed a difference in the volume of 

business in those two states? Because I think in New York for the 

last year or two, they have been under a statewide moratorium on 

hydraulic fracturing. 

Mr. HELLER. Well, we are waiting poised and ready for them to 

decide to start drilling up there. Yes. Most of the revenue from my 

company is coming from Pennsylvania as are the job opportunities. 

We are sort of treading water in New York hoping that opportunity 

avails up there also. 

Mr. LAMBORN. When a company comes in and invests in a half 

a million dollar piece of equipment, what kind of spin-offs—you already referred some to this, but I would like to bring this out just 

a little bit more—what kind of spin-offs does that have in terms of 

jobs that are created either in your company or in associated companies? 

Mr. HELLER. Let us look at the level above and below me. First 

off, we are buying the cranes which are built in Shady Grove, 

Pennsylvania. It is predominantly the machine that is being used 

in the fracking site. That plant has increased by a hundred percent 

employment over the last two years, because they were on their 

heels at the end of ’08. 

The manufacturer has had to ramp up to produce these machines. Specifically we are talking about the cranes that you referenced. My customer that then buys it employs multiple people to 

run that machine. You have safety people. You have oil riggers. 

You have operators, maintenance people, et cetera. One example of 

a customer that bought cranes from us, he has taken his employment from 100 to 230 in a two-year period as he has added these 

cranes. You can see the levels above and below me are just a multiplication of our results. 

Mr. LAMBORN. Thank you. 

Mr. Chase, I would like to ask you a couple of questions on 

water. First of all, is water similar around the country, either what 

it looks like or where it is found, from state to state where you can 

expect Washington to have one size fits all and makes sense, or are 

there tremendous differences between states? 

88 

Dr. CHASE. There are differences in water. When I talk to my 

students about water and natural gas, it is like your hand and fingerprints. Everybody’s fingerprint is different, and everybody’s 

water has a little different fingerprint. I think it is especially important, as we heard from two members here, that when people 

take out a lease, when they lease with an oil and gas company, 

they can do a lot on their own, especially if they work as an association, to ensure that their water is tested prior to any operations 

that start in an area. 

Mr. LAMBORN. There is not anything to prevent someone from 

testing the water beforehand? 

Dr. CHASE. No. There is nothing to prevent it. In fact, they 

should make the companies test it, pay to have it tested by an 

independent source. Then after the drilling is done, it should be 

tested again. Then it should be tested again a year or two later. 

But the water in Pennsylvania might be a little different than the 

water in Ohio, for example, and it is going to be mineral content. 

You can have methane in water sometimes. 

The first natural gas well ever drilled in the United States, believe it or not, was drilled in 1821 in Fredonia, New York and it 

dug by hand to a depth of 27 feet. There was natural gas in the 

rock at a depth of 27 feet. Just up the river from Marietta, there 

is an area called Burning Springs Anticline, who was named Burning Springs by the Indians because of natural gas seeps coming out 

of the swamps. 

Colonel Drake, someone mentioned Drake’s well up in Titusville, 

Pennsylvania, drilled in 1859, was drilled to a depth of 69 feet. 

Mr. LAMBORN. Water disposal, what can or should be done? For 

instance, what is done in Ohio? Because I have heard concerns 

about farmland being contaminated by the improper distribution of 

toxic water so-called. 

Is it toxic, number one? And what should be done with water 

after it is used in a well to be responsible? 

Dr. CHASE. Ohio has very strict laws that the Department of 

Natural Resources administers with regard to what we do with 

frack water or drilling fluids after we are done with them. As someone mentioned, it has to be disposed of in Class II disposal wells. 

It can’t be dumped into a stream, a creek. It cannot be disposed 

of on country roads unless a township has permitted that. 

There are very strict regulations on that. Our disposal wells are 

constructed to minimize—not minimize—but to avoid any possible 

contact with surface groundwaters by virtue of the casing and the 

cement that we have in the borehole protecting the groundwater. 

So in my mind, it is not an issue. We have a very safe system here 

in Ohio. 

Mr. LAMBORN. All right. Well, I want to thank each member of 

the panel for being here, for your testimony and for answering 

questions. If we have any additional questions that we submit to 

you in writing, we would ask that you respond to those as well. 

If there is no further business, without objection, the Committee 

stands adjourned. Thank you all for being here. 

[Whereupon, at 11:51 a.m., the Subcommittee was adjourned.] 

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