[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
                        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
      



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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
            EDWARD J. MARKEY, MA, Ranking Democratic Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Paul Tonko, NY
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       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                    Peter A. DeFazio, OR
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Mike Coffman, CO                     Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Dan Benishek, MI                         CNMI
David Rivera, FL                     Martin Heinrich, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Paul A. Gosar, AZ                    Betty Sutton, OH
Bill Flores, TX                      Niki Tsongas, MA
Jeffrey M. Landry, LA                Paul Tonko, NY
Bill Johnson, OH                     Edward J. Markey, MA, ex officio
Mark Amodei, NV
Doc Hastings, WA, ex officio


                                 ------                                
                                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

                                     



   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 increase 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 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 
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 economic 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.
    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 industries 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.
                                 ______
                                 
    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.
    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 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. Three-fourths 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.
    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 
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?

 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 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.
    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 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 petroleum 
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 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.
    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.
    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.
    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.
    [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.
    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?
    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.
    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 make-up 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?
    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.
    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 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 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 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.
---------------------------------------------------------------------------
    \1\ Shale 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
---------------------------------------------------------------------------
    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:
---------------------------------------------------------------------------
    \2\ Ohio'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
---------------------------------------------------------------------------
          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 production 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.
---------------------------------------------------------------------------
    \3\ Technical Program Overview: Underground Injection Control 
Program; United States Environmental Protection Agency; Office of Water 
4606 EPA 816-R-02-025; revised July 2001
---------------------------------------------------------------------------
    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 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.
---------------------------------------------------------------------------
    \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

---------------------------------------------------------------------------
    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 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.
---------------------------------------------------------------------------
    \5\ Secretary of Energy Advisory Board, Shale Gas Production 
Subcommittee, 90-Day Report; SEAB, August 18, 2011, http://
www.shalegas.energy.gov/
    \6\ Prudent Development: Realizing the Potential of Abundant North 
American Natural Gas and Oil Resources, National Petroleum Council, 
September 15, 2011, http://www.npc.org/
---------------------------------------------------------------------------
    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.
    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 Sub-Committee 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?

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 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:]

     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 
Youngstown-Warren 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, 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?

             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 long-term 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 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:]

                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 manufacturing-based 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, high-technology 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 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.
                                 ______
                                 
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    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 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 contamination 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 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 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\
---------------------------------------------------------------------------
    \1\ EPA/600/D-11/001/Feb 2011water.epa.gov/type/groundwater/uic/
class2/hydraulicfracturing/index.cfm 19-24
    \2\ nytimes.com/interactive/2011/02/27/us/natural-gas-documents-
1.html#document/p391/a9939

        EPA testing of brine in the Pennsylvania Brine Treatment--
        Franklin plant recorded benzene at 26 times federal drinking 
        water standards.\3\
---------------------------------------------------------------------------
    \3\ nytimes.com/interactive/2011/02/27/us/natural-gas-documents-
1.html#document/p416/a9943

        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\
---------------------------------------------------------------------------
    \4\ op. cit. p. 646.
    \5\ scientificamerican.com/article.cfm?id=marcellus-shale-natural-
gas-drilling-radioactive-wastewater

        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\
---------------------------------------------------------------------------
    \6\ upi.com/Science_News/2010/10/25/Tapping-natural-gas-could-
unleash-uranium/UPI-62061288048109/

        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\
---------------------------------------------------------------------------
    \7\ op. cit. p. 644 ff.

        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\
---------------------------------------------------------------------------
    \8\ op. cit, multiple documents
    \9\ see for example NY Times,, op.cit., p. 1056 ff.; reuters.com/
article/2011/04/20/us-chesapeake-spill-idUSTRE73J6D820110420, 
newsworks.org/index.php/local/item/18791-02spfrack

        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\
---------------------------------------------------------------------------
    \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
    \11\ Stephen G. Osborn, et al., ``Methane contamination of drinking 
water accompanying gas-well drilling and hydraulic fracturing,'' PNAS, 
May 17, 2011, 108 (20), pp. 8172-8176

        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\
---------------------------------------------------------------------------
    \12\ denverpost.com/breakingnews/ci_18880544, 9/12/11
---------------------------------------------------------------------------
    The City's letter concludes that the sales will ``irreparably 
impair the drinking water supplies and economy of the City of Athens, 
Ohio.'' \13\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \14\ Digging Deeper into Job Claims, Keystone Research Center, June 
2011
---------------------------------------------------------------------------
    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 Energy-Focusing 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 long-term 
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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \16\ nytimes.com/2011/02/27/us/
27gas.html?_r=4&scp=5&sq=natural%20gas&st=cse
---------------------------------------------------------------------------
    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 in flowback may include acetone, 
benzene, ammonia, ethylbenzene, phenol, toluene, and methyl chloride 
(NYSDEC, 2009).''
---------------------------------------------------------------------------
    \17\ EPA/600/D-11/001/Feb 2011water.epa.gov/type/groundwater/uic/
class2/hydraulicfracturing/index.cfm
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \18\ EPA/600/D-11/001/February 2011
---------------------------------------------------------------------------
    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.''
---------------------------------------------------------------------------
    \19\ Theo 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
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 relationships. 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.
---------------------------------------------------------------------------
    \22\ chec.pitt.edu/mediasite.cidde.pitt.edu/mediasite/
SilverlightPlayer/Default.aspx?peid=689293c50f404f12b8c628b8f2285780, 
Dr. Simona L. Perry, Rennselaer Polytechnic Institute, ``It's like 
we're losing our love'': Bradford County social impacts from shale 
boom. 11/11
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \23\ http://ecowatch.org/2012/as-fracking-boom-hits-ohio-deceptive-
industry-practices-squeeze-landowners/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.
---------------------------------------------------------------------------
    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
          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?
    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 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.
    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.
    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 
industry-related 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 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.
    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?
    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 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?
    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 
natural 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 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 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.
    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 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 steel-making 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.
    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 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, 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 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 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.
                                 ______
                                 
    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 percent 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 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.
    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.

[GRAPHIC] [TIFF OMITTED] T3226.004

                                 
    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.
    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 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.
    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 flowback water to put it back into the 
drinking supply. They offered tiny per-acre sums to naive 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 well-siting 
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 fossil-fuel-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.
    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, 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 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.
    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 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 
department, 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.
    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?
    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.]