February 2016 PIPP Pipeline

Pennsylvania Independent Petroleum Producers Association, Inc.

A 501(c)(6) Non-Profit Business Association

—Celebrating 31 years—

Volume 25, No. 1 Supporting the Small Producer February 2016

—IN THIS ISSUE—

The President’s Message . . . . . . . . . . . . . . . . . 1

EQB Passes Oil & Gas Regulations Updates. . 1

Supreme Court rules on Clean Energy Plan. . 2

What is PIPP doing for me? . . . . . . . . . . . . . 3-4

Crude Oil & Natural Gas Pricing . . . . . . . . . . 4

Regulations could doom small producers . . . . 5

“When Oil Goes Down” . . . . . . . . . . . . . . . . . . 5

“Scarecrow” by Joe Thompson. . . . . . . . . . . . 6-7

Produced Water Treatment & Reuse . . . . . . . 7

GoFundMe page established . . . . . . . . . . . . . . 8

The President’s Message

February 2016

As you all know things are very bad in the oil and gas industry right now. There have been a huge number of layoffs. Everyone in the industry is feeling the effects of the low oil and gas prices. The good news is that the experts predict the price of oil should start to rebound sometime near the middle or end of the third quarter of this year. Let’s hope they are right.

On top of all the problems caused by low prices, the worry is still there that the new Chapter 78 regulations will become law. All three trade organizations and COGAC (Conventional Oil and Gas Ad-visory Committee) have been working hard to try to stop that from hap-pening. There is legislation once again in the Fiscal Code, like in 2014, to make the Department start all over again in writing regulations that fit our industry. We have legislators working hard to keep our bill in the Fiscal Code. There are also legislators working hard to have it re-moved. Even if we can get the bill on the Governor’s desk, we don’t think he will sign it. According to law he cannot line item veto it out because it has nothing to do with appropriations, but he has made statements saying he will see us in Court.

We that have been working on this and following it closely believe we will have to go to Court to get these regulations thrown out. We, along with our lawyers, believe the Department has made many mistakes along the way of writing these regulations and they won’t hold up in Court. So we still need you to dig deep and come up with money for our legal fund. When we win this legal case it will benefit every small business in Pa. as it will become case law and keep the Depart-ment from placing regulations on businesses that cause an economic hardship. If every one in PIPP would donate we could raise the money we need for our cause. If these regulations become law I don’t know how anyone will be able to comply with them. Please give!!!

The new Produced Water Management Group has been mak-ing real progress in the short time we have been together. We will very soon be a corporation with the name Pennsylvania Producers Cooper-ative. All three trade groups will be a part of this and have members sitting on the Board of Directors. Our mission statement has not been written yet but it will be about finding the most cost effective way of treating and disposing of our production water so everyone can comply with the law.

By the middle of March we hope to have a treatment system on

the ground and working. Water will be hauled in from all regions of the

industry to run through the system to see if it will work for every kind of

water. This will take a couple of weeks to do because of all the testing

that will be required. We will keep you updated on our progress.

Mark L. Cline, Sr.

PIPP President

Environmental Quality Board Passes Updates to Oil and Gas Drilling Regulations

February 4, 2016

In calling for passage of the revised regulations, DEP Secre-tary John Quigley (center) says they are long over-due

HARRISBURG -- The Pennsylvania Environmental Quality Board (EQB), an independent board responsi-ble for adopting environmental regulations, yesterday passed the revisions to the oil and gas drilling regula-tions by a vote of 15 to 4. The “Environmental Protec-tion Performance Standards at Oil and Gas Well Sites” (Chapters 78 and 78a) rulemaking modernizes and strengthens the environmental controls employed by both the conventional and unconventional industries to assure the protection of public health, safety, and the environment.

In addressing surface activities at well sites, the amendments improve protection of water resources, add public resources considerations, protect public health and safety, address landowner concerns, en-hance transparency, and improve data management. The regulatory language has been formulated with the input of more than 25,000 Pennsylvania residents.

A video of the meeting is available on DEP's YouTube channel.

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February 2016 PIPP Pipeline

NBC Online News February 9, 2016

The U.S. Supreme Court on Tuesday blocked enforcement of the Obama administration's ambitious new plan for cutting greenhouse gas emissions from power plants.

The justices granted a plea from 30 states that asked for a temporary hold on the new Clean Energy Plan while the lower courts decide whether the Environmental Protection Agency has the legal authority to impose it.

Four members of the court, Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan dissented and said they would have allowed the EPA to continue enforcing the rule during the court battle.

Announced last October, the plan seeks to shift the nation's energy production away from coal-burning power plants toward cleaner sources, including solar and wind power.

The states argued that EPA's proposed reductions on carbon emissions are impossible for existing power plants to meet and would force their operators to shut down them down, "a massive reordering of the states' mix of generation facilities."

If the rules are allowed to stand, the states said, the "EPA would no longer be an environmental regulator but rather the nation's central planning authority" — which they argued is an illegal overreach of the agency's authority and an unconstitutional intrusion on states' rights.

A federal court in Washington, which is now reviewing the Clean En-ergy Plan, declined in January to put it on hold while the issue is pend-ing. The states, joined by a coalition of business groups, then sought a stay from the Supreme Court.

Separately, a group of energy companies told the justices that EPA's Clean Power Plan will force 53 coal-fired electric generating units to shut down this year, with another three taken offline in 2018.

Eighteen other states are supporting the EPA, joined by the National League of Cities, saying they have "a compelling interest in reducing carbon-dioxide emissions in order to protect their residents' health and welfare from the dangers of climate change."

The policy is a centerpiece of the U.S. commitment to reach the pollu-tion targets it pledged to meet at the UN climate summit in Paris late last year. By 2030, it would reduce carbon emissions to a level 32 per-cent below what they were in 2005.

PIPP Pipeline

Published by Pennsylvania Independent Petroleum

Producers Association, Inc.

Mark Cline, President 1577 Prentisvale Rd., Eldred, PA 16731

Phone: 814 366-2324

Joyce Cline, Editor PO Box 103, Bradford, PA 16701-0103

Phone: 814 368-5395 * Fax: 814 368-2283

E-mail: pipp1985@verizon.net

Website: PIPPonline.com

For information on advertising, contact the editor or visit the “Newsletters” page on the website.

PIPP does not provide mailing lists to any person or company. Mailings can be submitted to the PIPP office

but costs must be paid in advance by the provider.

BOARD OF DIRECTORS

Mark Cline—Eldred, Pa. Willard Cline—Bradford, Pa.

Alex Elder—Parker, Pa. Len Elder—Parker, Pa.

Michael Graham—Oakdale, Pa. William Henderson—Pleasantville, Pa.

Robert Hurrelbrink—Kossuth, Pa. Thomas Karg—Oil City, Pa.

John Lendrum—Cranberry, Pa. Jerry Macurak—Bruin, Pa.

Carl McCall—New Bethlehem, Pa. Rich McComb—Stoneboro, Pa.

Thomas Miller—Olean, NY Michael Perrett—Rouseville, Pa.

R.B. Robertson — New Bethlehem, Pa. Brian Rottman—Petrolia, Pa. Karl Rottman—Petrolia, Pa.

Scott Schreffler—Emlenton, Pa. Joseph Stiglitz—Franklin, Pa.

Raymond Stiglitz—Franklin, Pa. R.V. Straub—Boalsburg, Pa.

Joe Thompson—Pleasantville, Pa. Burt Waite—Cochranton, Pa. Glenn Weaver—Franklin, Pa.

Honorary Board Members

John Ifft—Oil City, Pa. Donald Taylor—Oil City, Pa.

OFFICERS

President: Mark Cline

Vice President/Recording Secretary:

Michael Graham

Corresponding Secretary/Treasurer: Joyce Cline

Immediate Past President: Gary Hovis (deceased)

Executive Director: Vince Straub

Government Consultant: John Peterson—

Pleasantville, Pa.

2016 PIPP picnic

and annual meeting

July 16th

“Like” PIPP on Facebook:

https://www.facebook.com/PIPP1985

Supreme Court Blocks Enforcement of Air Pollution Rule By PETE WILLIAMS

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February 2016 PIPP Pipeline

What is PIPP doing for me? By Joyce Cline

Are you frustrated because you don’t hear from PIPP as often as you would like?

As the editor of your newsletter, perhaps I have not published newsletters as often as I should have. Keep in mind that PIPP has no paid staff so newsletters have to be squeezed into doing my “real” work for Cline Oil. But you should know that, even when you don’t hear from your or-ganization, PIPP is working on your behalf almost every day.

We asked President Mark Cline to make a list, highlighting just some of the meetings and other work he and other board members have done on your behalf in just the last 4 months. Here is a sampling:

10/06/2015 First meeting of Producer Water Management Workgroup in Pleasantville.

10/08/2015 Conference call with Bill Henderson, Burt Waite and Mark Cline to discuss setting up a co-op

10/13/2015 Produced Water Management Meeting at Henderson’s home, attended by Henderson, Waite,

Cline, Joe Thompson, Dave Clark (PGCC) and Lou D’Amico (PIOGA)

10/14/2015 Conventional Oil and Gas Advisory Committee (COGAC) conference call; Waite and Cline partici-pated.

10/20/2015 DEP Area of Review (AOR) Webinar. Cline, Henderson and Thompson participated. (The AOR

workgroup will be writing a Technical Guidance Document required by the new regulations.)

10/22/2015 Henderson, Cline, Clark (PGCC), Art Stewart (PGCC), and Tyler Martin (PGCC) met at Cam-

eron Energy in Warren to discuss the AOR.

10/30/2015 Thompson and Mark Miller (Moody & Associates) met with Executive Director of Titusville

Redevelopment Authority to discuss financing the co-op.

11/01/2015 Cline wrote a response to former DEP Secretary David Hess’s “PA Environment Digest” blog

regarding Sen. Scott Hutchinson’s Senate bill prohibiting the DEP from finalizing and adopting

Chapter 78 regulations stating that the regulations are “invalid” and not in compliance with

the Regulatory Review Act.

11/04/2015 Produced Water Management Meeting in Pleasantville.

11/06/2015 Cline persuaded DEP Deputy Secretary Scott Perry to write a letter assuring that participa-

tion in the AOR workgroup would not be held against us if legal action was eventually taken.

11/09/2015 Henderson, Thompson and Cline officially joined the AOR workgroup.

11/10/2015 DEP AOR webinar. Henderson, Thompson and Cline participated.

11/18/2015 Cline and Tom Miller did a radio interview that aired in the Pittsburgh, West Virginia and Ohio

areas.

11/20/2015 AOR conference call in the AM. In the PM, Henderson and Cline were on a conference call

with the owners of Bear Lake Disposal wells.

11/23/2015 AOR conference call in the AM. In the PM, Henderson, Cline and John Peterson held a con-

ference call.

11/24/2015 COGAC conference call; Waite and Cline participated.

11/24/2015 Cline sent a letter to the DEP explaining our position on the AOR.

12/01/2015 DEP AOR meeting in Phillipsburg, attended by Henderson, Thompson and Cline.

12/04/2015 DEP AOR conference call. Henderson, Thompson and Cline.

12/08/2015 DEP AOR webinar in the AM; in the PM, meeting at Henderson’s home to discuss Brine

Treatment and Reuse. Attended by Henderson, Thompson, Waite, Tyler Martin (PGCC), Ste-

ve Halmi (Halmi Engineering), Paul Hart (FRS) and Ben Jezovnik (Ergon).

12/151/2015 DEP AOR meeting in Phillipsburg, attended by Henderson, Thompson and Cline.

12/16/2015 Produced Water Management Meeting in Pleasantville.

Continued on page 5.

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February 2016 PIPP Pipeline

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2.28

2015 2.99 2.87 2.83 2.61 2.85 2.78 2.84 2.77 2.66 2.34 2.09 1.93

2014 4.71 6.00 4.90 4.66 4.58 4.59 4.05 3.91 3.92 3.78 4.12 3.48

2013 3.33 3.33 3.81 4.17 4.04 3.83 3.62 3.43 3.61 3.67 3.62 4.24

2012 2.89 2.46 2.25 1.89 1.94 2.54 2.59 2.86 2.71 3.03 3.35 3.35

2011 4.08 4.23 3.90 3.98 4.12 4.19 4.27 4.20 3.82 3.62 3.35 3.14

2010 5.14 4.89 4.36 3.92 4.04 4.25 4.36 4.22 3.76 3.69 3.34 3.96

2009 5.15 4.19 3.72 3.43 3.45 3.45 3.43 3.14 2.92 3.60 3.64 4.44

2008 6.99 7.55 8.29 8.94 9.81 10.82 10.62 8.32 7.27 6.36 5.97 5.87

2007 5.83 6.91 6.78 6.37 6.85 6.72 6.32 5.87 5.42 5.90 6.58 6.97

U.S. Natural Gas Wellhead Price (Dollars per Thousand Cubic Feet)

Year

Avg.

Year High Year Low Current 9/24/15

2016 33.04 22.21 22.21

2015 44.87 57.43 30.73

2014 88.66 102.76 49.27

2013 95.72 105.55 89.02

2012 92.07 106.82 75.49

2011 90.07 108.25 70.72

2010 73.19 85.50 61.75

2009 55.78 75.00 28.75

2008 94.11 138.50 28.25

2007 68.40 93.25 47.25

2006 63.15 73.75 52.75

2005 53.74 67.00 39.50

Source: American Refining Group, Inc. CRUDE PRICES

CRUDE OIL PRICING GROUP 2 (OH/PA/NY)- 60.0 – 149.99 net barrels

from a single location

Natural Gas Spot Prices at the Henry’s Hub

12/17/2015 PIPP Board Meeting in Marienville.

12/19/2015 PIPP sent a letter to DEP Secretary Quigley about the FRS brine plant.

12/21/2015 Conference call about produced water. Cline, Henderson, and Dale Skoff and Steve Hughes of

Tetra Tech.

12/22/2015 COGAC webinar. Waite and Cline.

01/06/2016 COGAC conference call. Waite and Cline.

01/07/2016 PIPP Executive Committee meeting with some Produced Water Management group members.

Lou D’Amico (PIOGA) and Tyler Martin & Doug Jones (PGCC) attended.

01/08/2016 Conference call with Cline, Henderson, Clark (PGCC), D’Amico (PIOGA) and Paul Hart (FRS)

01/13/2016 COGAC meeting in Harrisburg. Waite and Cline.

01/14/2016 Cline notified DEP that Mark Miller was placed on the workgroup writing a Technical Guidance

Document for water replacement. Waite volunteered to join it at the COGAC meeting.

01/19/2016 Cline organized an Energy Forum in Bradford for Congressman Glenn “GT” Thompson.

01/20/2016 Meeting at DEP Meadville office with John Holden, DEP Clean Water Program Manager about

permits. Henderson, Waite, Cline, Shane Krieble (PIOGA) and Make Shuette (GCI)

01/26/2016 Bear Lake Disposal well visit. Cline, Thompson, Ray Stiglitz, Glenn Weaver and Mark Miller.

01/27/2016 COGAC met with IRRC (Independent Regulatory Review Commission in AM; in PM, members

of PIPP met with IRRC, also. Henderson, Thompson, Cline Chris Carusone (PIPP’s attorney)

and Ben Jezovnik (Ergon).

02/03/2016 COGAC attended EQB (Environmental Quality Board) meeting in Harrisburg.

02/04/2016 Cline, Henderson and Thompson met with Seth Pelepko, DEP Chief of Subsurface Activities,

Suresh Muthulingam, PhD, Penn State University and Richard Burgan, USTIF (Underground

Storage Tank Indemnification Fund) Program Director.

Continued from page 3.

5

February 2016 PIPP Pipeline

New regulations announced Wednes-day by the state Environmental Quali-ty Board could spell the end of inde-pendent oil producers in this region.

The board voted Wednesday to ap-prove Chapters 78 and 78a, the “environmental protection perfor-mance standards at oil and gas well sites.” Despite a four-year process of gathering comment and hearing testi-mony from thousands of people, the board still got it wrong, according to local producers and a legislator.

“Today’s vote by the ‘independent’ Environmental Quality Board (EQB) was simply a rubber stamp on another dangerous regulatory overreach by the Department of Environmental Protec-tion,” said state Rep. Marty Causer, R-Turtlepoint. “Unfortunately, the board’s unreasonable and unnecessary attempts to punish the industry pose a serious threat to the future of conven-tional oil and gas production in our region, and to the jobs of tens of thou-sands of people.”

Yet that is not how the DEP sees it, nor how Gov. Tom Wolf’s office sees it.

“Energy development and gas produc-tion are important parts of our econo-my and safe-guarding our environ-ment is paramount,” said Wolf spokesman Jeffrey Sheridan. “These updates to Chapter 78 and 78a achieve both objectives and are commonsense changes that many in the industry have already embraced. Additionally, the Department of Environmental Protection went to great lengths to increase public participation and take input from a diverse audience for these regulation revisions mandated by Act 13 of 2012. These updates are overdue and we are pleased they took a major step forward today.”

DEP Secretary John Quigley defended the regulations as well.“

These updated rules are long overdue and it’s time to get them across the finish line for the protection of public health, for industry certainty, and for the protection of our state’s environ-ment,”

aid Quigley. “The changes are incre-mental, balanced, and appropriate, and

February 4, 2016

Regulations could doom small oil producers By MARCIE SCHELLHAMMER Era Associate Editor marcie@bradfordera.com

are the result of one of the most trans-parent and engaged public processes in the history of the agency.”

Mark Cline of Cline Oil, who also serves as president of the Pennsylvania Independent Petroleum Producers (PIPP), said the problem is the DEP and the governor’s office don’t under-stand the conventional production in-dustry.

One of the state representatives who was in attendance at the board meeting Wednesday made Cline’s point for him.

“He said when the (update for the) regulations were started, they were for the unconventional industry. The con-ventional well industry has been well regulated since 1984,” Cline said. “We’re at 93.7 percent compliance.”

Calling the DEP an “out of control bureaucracy,” Causer said the agency “continues to ignore the recommenda-tions of its advisory boards, not to mention the will of the Legislature and the people we represent.”

The DEP’s advisory boards — the Oil and Gas Technical Advisory Board and the Conventional Oil and Gas Ad-visory Committee — “expressed con-cerns about the regulations but were not given the information they request-ed to fully assess their potential im-pacts,” Causer said.

The Pennsylvania Independent Oil and Gas Association’s president, Louis D’Amico, said, “The four-year process of developing these regulations has been an exercise in deception, misin-formation and disregard of the law by the Department of Environmental Pro-tection that escalated under Gov. Wolf.”

Cline said the board’s regulations are illegal in the respect that state law calls for regulations on the oil and gas in-dustry to be separate for conventional and unconventional drilling.

“They voted on it together,” Cline said, expressing how frustrated he was at the meeting, where he wasn’t per-mitted to speak. “It was the most hos-tile room I’ve ever been in. And Penn Future, they do not want the oil and gas industry in this state.

(Continued on page 8)

FOR SALE

Two Yellow Dogs

$500 each

Contact John Bulmer at (814) 352-4844

When Oil Goes Down

Disconsolate, blue and dejected, weary of life and its woes, Back to his home at night fall, the unhappy oil man goes. Now life in the oil field changes, sometimes rosy and bright. And then a gloom steals over, like shadows of the night. This man, with luck or judgment, when oil was selling high, Made deals that were successful, had known just what to buy. But luck or judgment failed him, fortune seemed to frown, With every cent invested, the price of oil went down! And oft as this has happened, he was caught unprepared, As creatures of the woodland in cruel traps are snared. Too late he now regretted, the money idly spent. He’d move into a stylish house, and paid a lot for rent. He’d spent his money freely, bought cars and radios. T’was easy to come, oh yes, and equally easy to go. “All that goes up is sure to come down” is another old saying quite true. Why don’t we remember, there’s always December, tho June skies are smiling and blue.

6

February 2016 PIPP Pipeline

SCARECROW By Joe Thompson

ember, PIPP Executive Committee

“Scarecrow on a wooden cross, blackbird in a barn 400 empty acres that used to be my farm.

I grew up like my daddy did, my grandpa tilled this land. When I was five I walked this fence as Grandpa held my hand…”

-John Cougar Mellencamp

Who can forget the plight of the small American farmer in the 1970’s and 1980’s? Small farms all across our great nation were being sold off, lost to land contracts and usurped by Federal and State government overreach and “Big Ag” takeovers. The bread basket of our country, once plowed and harvested by small, family owned businesses, was in danger of extinction. Americans were horrified. How could we let the very people who feed us virtually starve? America rallied behind small farms. Through Willie Nelson and his friends, Farm Aid, a national platform featuring a yearly concert and year round political action, was born and has raised tens of millions of dollars in support of small, family farms. While small farmers nation-wide still have to fight government overreach and the Monsantos of the world, they have been given a national voice and moral support from sea to shining sea.

Are the resources that heat our homes, fuel our transportation infrastructure and supply the DNA of products we use in every facet of our daily lives any less important than the food we grow on small farms nation-wide? Do we, as a Nation, not crave for more energy independence? Why, then, has the plight of the small, conventional oil and gas producer, to survive in an environment where new regulations threaten our very existence drawn so little attention?

“Rain on the scarecrow, blood on the plow This land fed a nation, this land that made me proud Son, I’m just sorry, there’s no legacy for you now…”

It is one thing for the supply & demand tango to send commodity prices sinking like a stone then rising like a feather. We have watched this dance for generations. Many of us have persevered through the hardest of these busts and have taken the booms with the love that is given (My grandfather once said to me, “Joe, if an oilman hasn’t gone broke at least twice, he hasn’t tried hard enough.”) It is quite another matter, however, when the laws of the state are blindly ignored in an effort to bring an end to your livelihood. The latter, my friends, is upon us.

Despite our concerted efforts, the Pennsylvania Department of Environmental Protection are inches away from the finish line to enact the changes to Chapter 78 of the Oil and Gas Act of 2012 (Act 13) into law. These regulations are in stark violation of the Regulatory Review Act, and as such, illegally promulgated. If these regulations are to be enforced as written, Pennsylvania will see our compelling industrial legacy vanish.

“There’s 97 crosses buried in the courthouse yard And 97 families who lost 97 farms

I think about my grandpa, my neighbors and my name Sometimes I feel like crying, like a scarecrow in the rain…”

We have had some victories in our fight against these proposed regulations: 1. Act 126 of 2014 which forced DEP to bifurcate chapter 78 into separate conventional and unconventional regulations 2. The formation of the Conventional Oil and Gas Advisory Council (COGAC), and 3. The formation of a workgroup to include industry professionals in the drafting of a Technical Guidance Document for

Ch. 78.52a and Ch. 78.73 “Area of Review.”(AOR)

But with every step forward we have been met with multiple setbacks. The bifurcation of Chapter 78 resulted in a cheap word processing exercise producing two virtually identical documents in Chapter 78 for conventional and Chapter 78a for unconvention-al. Much of the data presented by COGAC and the AOR workgroup has been largely ignored, deemed erroneous, or swept under the carpet.

Recently members of PIPP’S Executive Committee met with the Independent Regulatory Review Council (IRRC). They are tasked with the job of making sure all proposed regulations are in accord with the Regulatory Review Act. We learned that DEP had a card up their sleeve; instead of presenting the conventional and unconventional regulations separately as they had been “written,” DEP had packaged them together as one single vote. All or nothing. This meant that if a person wanted to vote FOR the unconventional regulations but AGAINST the conventional regulations they would be forced to make a choice as to which vote mattered more to them…as many of you saw on Wednesday February 3, 2016 the Environmental Quality Board passed the Chap-ter 78/78a package of regulations in a 15 to 4 vote.

“When you take away a man’s dignity he can’t work his fields and cows”

Despite these setbacks we are more determined than ever that our side of this story is the right side; the side of light and truth. Many of these regulations were created in a vacuum. They exist for the sake of the Department looking good to well-funded Envi-ronmental Groups with loud bullhorns. They can demonstrate no compelling need for these regulations because there is none. Our industry has been very effectively regulated for over thirty years now. We know for a fact that cost analyses, as mandated by the Regulatory Review Act (RRA), has not been adequately performed. We also know there are no exemptions or alternatives for small businesses as required by the RRA. While we have weathered endless disappointment, now is not the time to lie down. Now

7

February 2016 PIPP Pipeline

is the time that we must pull together as an industry and fight against regulations we know to be illegal.

“Rain on the scarecrow, blood on the plow…”

It seems inevitable that our efforts are going to take us to the courtroom. In order to do so, we will have to be able to pay our legal counsel. Christopher Carusone, the attorney leading our fight, has been inspiring. He has taken every measure he can to reduce our costs. He has stated on sever-al occasions the honor it is to work for PIPP and that he would do it pro bono if he could. We need the help of every member of PIPP. Send your donation to our legal fund. Ten, Fifteen, Twenty Dollars per month from each of you could mean the difference. Make the difference.

The lyrics quoted throughout this letter are from the song Rain on the Scarecrow by John Cougar Mellencamp. John, a native of rural Indiana, was appalled by the plight of the small farmer in America. His outrage gave voice to small farmers raging against the machine of the EPA and massive corporate farms much the way John Steinbeck’s “The Grapes of Wrath” had done for migrant farmers during the Great Depression. Our cries of outrage have been drowned in the torrent of reactionary environmentalism that has painted our small cottage conventional industry into the same corner as offshore, multinational, publicly traded, deep pocketed, shale and otherwise unconventional companies.

We don’t have a Grammy winning star to sing our out-rage. We probably never will. People will continue to take a moral stance against our conventional industry all while driving freely across our state in cars fueled by crude oil produced from a stripper well in McKean County; while cooking over a perfect blue flame that came from an Upper Devonian gas well in Indiana County; while heating their house with propane that came from a Speechly well in Ve-nango County. They are happily ignorant and may never understand the truth. While it would be tempting to “Let them freeze in the dark” we know THAT would be immoral. So, we take our fight to Harrisburg the only way we know how; through perseverance and hard work and stiff-upper-lipped resilience. We will rise above the uninformed, moral sword rattling with the truth, but only with your help.

Donate today. Donate tomorrow.

Donate again next month.

Donation to Legal Fund

Enclosed is my check for $___________________

Name of donor ____________________________

Address __________________________________

__________________________________

Make checks payable to: PIPP Legal Fund

Mail to: PIPP PO Box 103 Bradford, PA 16701

Production Water Treatment and Reuse By-Products

Early in the fall of 2015 Mark Cline and Bill Hender-son had a phone conference with Seth Pelepko of the DEP con-cerning the most important issues with producers. We told Seth that the number one issue with producers is dealing with the high cost of production water disposal. Seth gave us the con-tact information of a company called GCI Water Solutions based in Chicago, Illinois.

Bill contacted Mike Schuette and Josh Lauderman of GCI Water Solutions to discuss the situation with PA producers. He sent them production water analy-sis from the Venango/Forest County shallow well fields to see if they could treat our water. GCI called back and requested samples of our production water. Bill sent them water via UPS for them to test. After a few weeks of bench testing our water, GCI informed us that they were able to bring the TDS down to approximately 40 mg/L which is distilled water.

At our November 4, 2015 Produced Water Manage-ment Workgroup meeting, GCI Water Solutions made a power-point presentation as to their company and treatment process. GSI’s business plan for PA is for GCI to build the treatment facility and bring it to PA and operate the system with opera-tors bringing their water to the facility to be treated and the clean water discharged into approved receiving streams. GCI will charge the operator a fee for treating their water. GCI per-sonnel will operate and manage the treatment system.

Titusville Oil & Gas Associates, Inc. (TOGA) has a NPDES Part I permit and has filed for the Water Quality Per-mit with the DEP to be able to treat production water and dis-charge into Pithole Creek. GCI is in the process of building a pilot treatment system to bring to the TOGA site and test their first phase of their treatment process. On January 20, 2016 members of the Produced Water Treatment and Reuse Com-mittee and GCI met with DEP concerning the testing of the GCI Pilot Treatment System at the TOGA NPDES site near Pleasantville, PA. There are presently ongoing conversations between GCI, DEP and the Water Treatment Committee. It is hoped that the Pilot Treatment System can be set in place and tested in the spring of 2016. According to GCI, the 2nd phase is to add a desalination unit to the treatment system in late sum-mer, early fall to remove TDS and bring the water to safe water standards.

The other challenge to the project is what to do with the by-product after the water is treated. Bill Henderson evapo-rated 300 gallons of production water and received 245 pounds of slurry. Committee member Tom Paras of Nobullim LLC is engaged in the recycling of the by-product in the hopes of turn-ing it into a co-product and be able to market various elements found in the waste stream after treatment. The committee is actively working on this part of the process in the hopes of turning a waste stream into a income stream.

A special thanks should be given to the members of the Produced Water Treatment and Reuse Committee for their work to date. The committee has a lot more work to do and the committee will keep the membership informed in the future.

8

February 2016 PIPP Pipeline

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PERMIT NO. 15

“With the price of oil being so low and all of this going on, we’re done,” Cline said, lamenting that his family’s business may fold because of the onerous regulations. Of the DEP, Cline said, “They can do what they want and you can’t stop them.”

Describing the board meeting Wednesday, he said there were 16 amendments offered to clarify some of the language in the update — all were voted down. “There was an amendment to wait 180 days to enforce them,” Cline said, explaining the DEP should have forms and compliance documents and train-ing in place before producers are required to comply. “It got voted down. How are we going to comply? We don’t have forms or compliance documents, there’s no training.”

There’s a site restoration mandated in the new regulations, which sounds like it would be a good thing. But the sites need to be restored to how they were before the well was ever drilled — even on wells more than 140 years old, Cline ex-plained. “In order to meet this regulation, you’d have to cut down trees, put dirt back on a compact hillside … that regula-tion is going to cost more environmental harm than it will do any good.”

D’Amico brought up Wolf’s dismissal of all the long-serving members of the Oil and Gas Technical Advisory Board early on in his administration, calling it a “blatant disregard of the law and lack of transparency.”

He added, “It was demonstrated again today by the EQB’s refusal to vote separately on the conventional and unconven-tional rulemakings as unquestionably required by Act 126 of 2014, and by the EQB’s rejection of amendments to correct

(Continued from page 5) technical deficiencies in the regulations, even after DEP ad-mitted it intends to implement some regulations differently from what the provisions actually state.

“Like the Wolf administration’s persistent calls for a sever-ance tax on an industry in a free fall from low commodity prices, these regulations will accomplish three things: send more hard-working people to the rolls of the unemployed, stifle energy production in Pennsylvania and reduce the amount of taxes paid to the Department of Revenue.”

Causer added his displeasure with the DEP’s actions.

“Instead of pursuing reasonable, responsible and relevant reg-ulations for the two types of drilling, DEP thumbed its nose at the law, simply changed the name of the regulations and kept pushing them forward,” Causer said. “The board didn’t even cast two separate votes on the regulations today. Clearly, the DEP secretary and the Wolf administration have no respect for the laws of this Commonwealth.

The legislator continued, “The rubber-stamped regulations must now go to the Independent Regulatory Review Commis-sion as well as the House and Senate Environmental Re-sources and Energy committees. Rest assured, the fight is not over.”

With legal action becoming more likely every day, PIPP is looking to the public and or-

ganizations sympathetic to our cause to help fund this expensive endeavor. PIPP’s “gofundme” page can be accessed at

GOFUNDME.COM