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Oil Companies Compete For New Drill Sites In Eastern Ohio
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Improved drilling technology and a spike in crude oil prices is driving a mini-oil boom in an area of Eastern Ohio. The region sits atop a geology formation known as Utica shale. Oil and natural gas companies seek new leases from land owners in a bid to capture potential riches. But environmental groups want to temporarily stop new drilling for fear of groundwater contamination.
“The oil business is coming back,” said John Lybarger, Knox County recorder.
Lybarger has served nearly 20 years in office. Lately, he’s seen tell-tale signs of new interest in leases for mineral rights. Lybarger reports a spike in title searches linked to oil and gas drill permits. Across the room, Caitlin Rose is scrolling through land titles. Rose was hired as a contract worker for an Arkansas oil company. The company seeks drilling rights from area land-owners. She says she got her $1,000-a-week job because of new interest in deep drilling in Eastern Ohio.
“I have to come into the recorder’s office and run the title back about 120 years and make sure that no one has already reserved the mineral rights,” Rose said. “Because if someone already else has then we can’t actually lease the gas and oil.”
During her first three months on the job, Rose has searched titles in Medina, Ashland, Wayne, Holmes and Knox counties. She takes meticulous notes on yellow legal pads as she examines sometimes lengthy property titles.
“If I make a mistake, someone could sue them and things could get really hairy,” Rose said. “So, I have to make sure that everything is good with the people who we’ve actually signed the lease with.”
Knox County is situated on the western edge of a geological formation known as Utica Shale. The formation stretches roughly from Albany, N.Y., to Buffalo, N.Y., and Cleveland, Ohio, and then south to the Kentucky-Virginia border. The area has produced oil for more than 100 years. But geologists have yet to develop an estimate of how much more oil and gas is buried. Newer drilling techniques give the promise of recovering deeper oil reserves. Combined with the upward trend in crude oil prices, oil companies anticipate future profits. Lybarger said because of the history of oil production in the region, companies are more willing to take the risks of drilling new wells.
“I’m sure it’s a lot of sure bets too,” Lybarger said. “I mean, it just historically, Knox County has been rich in oil and this, this side actually of the state is rich in oil.”
In Knox County, releases for well permits jumped 25 percent last year. Other counties report even higher percentage increases. Southeast of Mount Vernon, more evidence of a mini-oil boom. Outside Butler’s Family Restaurant in Bladensburg, a sticker on the side of a muddied pickup truck reads: “Crude Oil feeds my family-pays my taxes.” Inside, a half dozen men take a lunch break. Jim Samples tells why there’s new interest in drilling for oil and natural gas.
“They can drill down and drill out horizontally now and that increases the production, you know, tremendously,” Samples said. “Compared to just drilling straight down and only drilling 50 feet of sand, they’ll drill four or 5,000 feet of it horizontally and fracture all of that in stages and that’s what makes the big wells are getting in the shale plays.”
Samples explains that the high pressure injection of water and chemicals into the well is necessary to force oil to the surface.
“But, if you couldn’t frack today, you wouldn’t have no oil and gas production in this country, hardly anywhere,” he said.
But, the fracking technique used in the deeper, horizontal wells is controversial. The Ohio Environmental Council wants to temporarily stop the Ohio Department of Natural Resources from issuing deep drilling permits. The group cites surface spills of chemicals and groundwater contamination in Utica shale oil fields in Pennsylvania.
Council lawyer Trent Dougherty said his organization this week sent a letter to Ohio lawmakersÂ ”urging the General Assembly to issue a moratorium on ODNR’s permitting of these, these oil and gas drilling permits for horizontal hydraulic fracturing, these deep shale drilling.”
Dougherty said the Ohio Environmental Council and other groups want a third-party, Ohio based independent study on the potential hazards of fracking deep wells in the Utica Shale.
“And then, if the ducks are in a row, then we can talk about opening that floodgate of oil and gas that the governor says is going to be a godsend for the state,” he said.
Ohio has not been a major producer of oil and gas for at least three generations. If the Utica shale yields large quantities of crude oil and prices remain high, Ohio will financially benefit from royalties.