Why did Ohio's state geologist get fired?
Just as the Utica deep-shale oil and gas play is getting started in Ohio, bringing with it megalithic economic, political and environmental consequences, one of the state's top front-line official dealing with the shale boom gets sacked.
Aside from his influence as state geologist, Larry Wickstrom, chief of the ODNR's Division of Geological Survey, has played an important role in the ongoing "fracking" debate in Athens County. Wickstrom co-authored a mid-March report ("Geology and Activity Update of the Ohio Utica-Point Pleasant Play") that shuffled the deck in Athens County with regard to the most controversial local news story of the year — the potential for a deep-shale drilling boom in our area.
Before the ODNR's Utica update in March, Athens County was aflame with the oil and gas debate. In this paper alone, we ran more than a dozen reader-submitted op-eds about the issue between November 2011 and March 2012, plus frequent news articles and letters to the editor.
But then the state report sucked the story dry when its redrawn map placed Athens County outside the probable Utica-Point Pleasant core play area. At the time, Wickstrom, in an interview with The Athens NEWS, explained, "What that (core play area) means, that's where the data indicates the highest likelihood of having high oil and natural gas liquids content in those rocks. That's where we expect most of the activity will concentrate during the early parts of this play."
Wickstrom did caution that the newly drawn map lacked sufficient data points to forecast potential oil or gas production in Athens County with any confidence, and that big energy and petroleum companies almost certainly had more and better information. He emphasized that his agency "fully expects people to go outside that core area and explore, and we hope they do."
However, at least locally, the new map had the same effect as spraying a fire-hose on a campfire; it doused what had been a raging news story, and temporarily pushed it off the front pages of local newspapers, including this one.
From anecdotal reports, the Ohio Geological Survey's redrawn map also made waves at higher levels, in both industry and government. Wickstrom wasn't shy about publicizing it. In mid-March, he publicly unveiled the study and accompanying map at the Winter Meeting of the Ohio Oil and Gas Association in Columbus. The OOGA later touted Wickstrom's glowing projections for a Utica wet-gas and oil play in eastern and central Ohio (just not in Athens County) on its website.
There's been some speculation that the redrawn map discouraged investment in oil and gas drilling operations in our part of the state and other areas cropped out of earlier maps, and perhaps exerted downward pressure on some oil and gas stocks. Without being privy to the backroom machinations of oil and gas executives and investors, however, it's difficult to say what actually happened.
THERE'S NO DOUBT, THOUGH, that the new ODNR map had a major impact on the controversial efforts to lock up oil and gas rights here in Athens County.
As has been oft-reported, the company most active in acquiring these rights, Cunningham Energy of Charleston, W.Va., and local attorney John Lavelle last fall negotiated the template for an oil and gas lease touted as "landowner friendly." While the original version of the lease, signed by dozens of Athens County landowners, offered generous signing bonuses, Cunningham was never able to land a venture partner to fulfill those leases (amounting to more than $100 million in signing bonuses). On May 4 Lavelle submitted Cunningham's new lease terms to his client landowners, offering substantially less upfront money. Nearly all of the promised money was pegged to future production.
In his letter, Lavelle cited the new ODNR Geological Survey map: "This revised map had an immediate and pronounced effect on interest in Athens County leasing in general and with Cunningham's negotiations in particular. The final major player (that Cunningham had mentioned earlier in the spring) declined to enter into a joint venture on the original lease terms given the unknown total organic content, width, breadth and scope of the Utica formation in most of Athens County… Since the release of the map, land sale prices have been greatly affected as well."
Other land brokers have been expressing the same sort of concerns about the potential for deep-shale oil and gas production in Athens County, citing the Wickstrom/ODNR map. Whether the map actually dampened investment interest to that degree or not, its concrete effect has been to severely depress lease offers to landowners in Athens County and other areas outside of the core Utica play area on the map.
Some background sources with deep knowledge of the industry are sure that the so-called "flippers" – operators who gobble up oil and gas leases, then turn around and sell them to bigger companies at a handsome profit – saw the ODNR's redrawn map as a gift from heaven. They basically had the state vouching for the idea that these far southeast Ohio oil and gas rights weren't worth much, which allowed them to lowball offers to landowners.
is in spite of various reports and developments suggesting the big energy
companies have more positive data about carbon resources in our area. One of
the bigger players, EnerVest Energy, put together a slide
show last December, based on their own information and research, showing
most of Athens County in the "wet gas" Utica play, and the northwest
corner of the county in the "oil window." In advancing that
projection, EnerVest almost certainly had data and information unavailable to
the ODNR when Wickstrom and his colleagues redrew the Utica map.
IN EARLY MAY, the main author of the ODNR map, Wickstrom, a 29-year employee of Ohio's Division of Geological Survey, lost his job.
In an email to selected colleagues and contacts on May 21, Wickstrom wrote, "For those who may not yet know, I was removed from the position of Division Chief and State Geologist about one and a half weeks ago. I guess the best way to put it is that I have a different vision of what a state geological survey should do than the current ODNR administration."
Asked earlier this week about Wickstrom's departure, Bethany McCorkle, deputy chief of communications with the ODNR, issued a prepared statement from ODNR Director James Zehringer. He announced a national search for Wickstrom's replacement, and thanked him for his service. "Larry will continue to provide valuable guidance and assistance to the division and will return to the classified service," Zehringer said. "Larry is a true professional and has offered to assist interim chief Mac Swinford in any way possible to ensure a seamless transition to new management."
On Monday, The NEWS asked Wickstrom about his departure from the ODNR, a year shy of his 30 years with the agency. Wickstrom said he wasn't ready to discuss his exit from the agency: "I'm just preparing for retirement."
Wickstrom declined to say whether his leaving the ODNR had anything to do with the redrawn Utica map or his statements about it. "It wasn't any one thing," he said. (This interview came more than a week after Wickstrom's aforementioned email to colleagues and sources.)
SO DID "THE MAP" RUFFLE industry, legislative and/or administrative feathers enough to result in Wickstrom's firing?
Who knows? It's not at all clear how the map might have hurt or benefited all the various role players in Ohio's ongoing oil and gas drama. The cast of characters, and their complex motivations and inter-connections, make the convoluted HBO series, "Game of Thrones," seem like a high-school play.
Not in any doubt is the fact that Wickstrom's most high-profile performance in the Ohio oil and gas drama – his public release of a game-changing deep-shale study and map – preceded his termination by less than two months.
Moreover, Wickstrom's affirmative release of the ODNR's Utica core play area map, and the resulting publicity about it, were more remarkable than anything contained in the report. This report almost certainly wasn't news to the big oil and gas companies who eventually will develop most of Ohio's deep-shale resources. They have their own proprietary information, and nothing the state released on this topic was likely to impress or surprise them.
The main effect of the ODNR report would have been on two classes of people: A) Individuals impressionable enough to be influenced by this sort of information; and B) individuals who would have an interest in trying to manipulate and exploit those individuals in Class A.
Which raises a question for former Ohio Geological Survey Chief Wickstrom:
Why release a newly redrawn map of Ohio's most likely areas for productive deep-shale oil and gas drilling when at the same time you're admitting that 1) your information is spotty for areas outside the core area; and 2) the oil and gas industry has far better information than you do?
This question becomes all the more important when one considers the big splash made by the ODNR map's release.
Barring more information, any conclusions about why the Gov. Kasich administration forced Larry Wickstrom out of his job are at most educated guesswork. We're hoping that public records requested from the ODNR earlier this week will allow for something more substantial than guesswork.