The Community, Connections & Commerce Podcast, presented by OUE & St. Clairsville Chamber - Community, Connections, & Commerce Episode 17 with Jim Milleson Pt. 1

Episode Date: January 21, 2025

Good morning, welcome back to Community Connections and Commerce. It's cold in this room, probably cold outside as well. I'm Drake Watson, along with Wendy Anderson, as always, and our special guest this morning, Jim Millison. Jim, we appreciate you coming on this morning and taking the time out of your day to come talk to us. I know there's a lot better things you could be doing right now, but we are grateful for your time this morning. Thanks for having me. Welcome, Jim. We really appreciate you taking the time. Thanks, Wendy. So I've got a ton of notes here that I've written down just in the short time

that we've spoken before coming on here. And you've got a lot of titles and a lot of things that you're involved in. I guess I'll jump in first with your kind of energy background and kind of what your story is. I mean, president of the Ohio Valley Energy Association. You do a ton of things with oil and gas. You mentioned 250 Pioneer as well. Just kind of dive in, if you could, on all the things that you do and kind of how you got to where you are. Well, the energy business has always been part of the Ohio Valley, whether it was gas, oil, coal, or, well, say, natural resources in general. But I got my start in 2004, Marietta College. My youngest son

decided to major in petroleum engineering and came home for Thanksgiving and talked to my dad about horizontal drilling. And I leaned over to my wife and I said, what the heck are we paying $38,000 a year for him to go to Marietta. He must not be going to classes. And she said, why? I said, because he's talking about drilling laterally. And you don't drill wells laterally. And I said, I don't think he's going to classes. Well, little did I know.

So that winter, I went down and met Dr. Chase, who was head of the petroleum engineering department. And from that day forward, I've been involved in oil and gas. And my son has left Marietta College when he graduated and has been working for Chevron ever since in the Houston office. And he and I together decided that energy was going to be a long-time future in Ohio. So my older brother in 07 worked for Governor Strickland at the ODNR as the assistant director for the Department of Natural Resources. So we started getting ahead of what then was the Marcellus

and what are we going to do in Ohio. So we started researching Point Pleasant and the Utica Shale, created maps on the dry gas, the wet gas, the heavy liquids, and the oil window. Took those maps in 07 and traveled to Oklahoma, Texas, Colorado, Louisiana, and went to every conference we could possibly go to to promote what we called then the Utica Point Pleasant Shale. And people thought we were crazy. By 2010, we'd got the right people in. And Aubrey McClendon, at that time CEO of Chesapeake, and I had a long sit down and he basically said, we're trying to hurry up and lease as much ground as we possibly can before you dumb hillbillies wake up. And that struck a chord, struck a chord hard that in my mother, she lived on a farm in Cadiz, Harrison County.

And her family sold their coal rights. And never in my granddad's wildest dreams would he have dreamed that there was going to be a high wall and they would mine right up to the milk house. But they did. And that made my mom get into the real estate business so she would understand land and contracts and minerals, which that's why I got in the real estate business. But more importantly, we're not going to let this happen to landowners, more importantly, mineral owners of the Ohio Valley. Get to educating people was the thing we got to do. So just like I got educated at Marietta through my son, we started holding public meetings all over the Ohio Valley.

Went to West Virginia, went to PA, went to Northeast PA, where the Marcellus had been going on since 2004. Talked to landowners, talked to farmers, said, what would you do different today if you had known then what you know now? So we started doing education. And I've made it my life's work since 07 to educate people and that's how we really got started in the energy business wow that's a great story okay since then everything's just kind of rolled yeah yeah all right so you are invested in the

community and everything that that i had written down that you do. Why? What's your why? I suppose the why is my grandkids, the environment, the land. Being a real estate brokerage owner, our company is named Homeland, and we're going to protect the homeland my family came from scotland in 1652 on a prisoner ship believe it or not because they wouldn't bow to the king and they they wanted to be free they didn't want to be controlled by a dictator or king so they got shipped to the americas in 1652 by 17, they had found their way through the Appalachian Mountains and crossed the river. True pioneers. So that kind of plays into our companies.

Hard work, dedication, fighting off the Indians, cutting the timber, building your way, starting a farm. So for nine generations, our family has been in the same area, little area of Freeport and Tippecanoe in the western side of Harrison County. Great people in Freeport. Thank you. Thank you. We think that the legacy of the pioneer carries on, but more importantly, it's that ownership going back to our Scottish roots and protecting the land and protecting what's yours and what you fought for every rock that you've moved off the field or every tree that was planted you want to protect those rights and not let people come in here and take it for granted

one of the stories we remember in 2011 was taft drilling t-aF-T. We had hats and t-shirts that said TAFT drilling and so people were complaining about all the out-of-state people coming into the area. Well we had to remind them that this isn't Texas. Right. And the T-A-F-T you can take it for granted what that stands for. With the understanding we want you here but understand we know a little bit about oil and gas, and we've been doing oil and gas a lot longer than you Texans have. Right. So we wanted to make sure we weren't being taken advantage of. Okay.

But to do that, you had to educate people and remind them of their roots, why you live here in the Ohio Valley. And then that came back to getting the people who were coming here to understand the values of people that live here, that hardworking pioneer spirit, getting up every morning, taking your lunchbox or your lunch pail to work with you, having dirt underneath your fingernails by the time the day was done, and needing to shower when you got off work, not before you went. You know, that type of mentality. But at the same time, community-oriented, family and friends, that if something happened to a neighbor down the road,

you'd be the first one there, whether it was baking cookies for them or helping them rebuild a house. Somebody gets sick in the neighborhoods or the communities of our region, we have a fundraiser. We have a spaghetti dinner or whatever it is. That camaraderie and being like a family is all over the Ohio Valley. Western PA, Eastern Ohio, the Panhandle. We all kind of have that similar desire because we're a mixed group, believe it or not. Right. We're Italians, we're Scottish, we're Irish, we're Czechs, and you can go on and on. A lot of Polish families, but we've all come together. One of the partners with me at 250 Pioneer, which is one of the names of our companies, Polish family. Tells the story. His grandpa Andy and my grandpa were great friends about a small town in Belmont County.

They actually have an establishment called Polish Club. And back then, the coal miners, you had eight separate ethnic groups going underground together working at the mine. Wow. But when they came back up, they all went their separate ways. They had their separate bars, their separate restaurants. And it's still that way in Fairpoint, you know, off Route 9. So when you think of Fairpoint, you see, well, what's all these bars for? Well, there used to be eight or nine of them.

But people worked together. And back then, and this is still the same mentality today of the High Valley, the miners, coal miners, which this area is heavily, heavily thankful to all the coal miners, they would eat their dessert first. And I asked Andy Malarcy, why would you do that? He said, because you wanted to have the best in your lunch pail first, because you may not ever get another taste of food. You might not come out of the mine. So people went to work knowing they were risking their life every

day. And sometimes that mentality is hard to find in certain parts of the country, not in the Ohio Valley. People take every day as a blessing. We're not taking anything for granted here. We work our tails off. We get what we work for, and we expect that from other people. So I guess that's the Ohio Valley in a nutshell as far as I'm concerned. I drive through Fairpoint almost every day. I never knew that. That's a really nice little nugget of information.

Yeah, stop at the park. It's actually named after Grandpa Malarsik. Back behind that church? Yeah. Yeah, okay. Malarsik Park. Wow. But there's many stories like that

from generations after generations of immigrants that have come into this country and have settled and through hard work became part of the community. Right. Wow. What challenges have you faced, say the last, I don't know, say, 10 years? What have you seen has been a huge challenge?

And again, I say all your jobs here. I would think the biggest challenge is the gullibility of the people that live here. We trust people. Appalachia people, Ohio Valley people feel, if you look me in the eye and shake my hand, you're telling me the truth. Right. People take advantage of that. Yeah, they do. That can get you in trouble sometimes. Yeah. And so I think that's been the biggest challenge is trying to educate people to say, listen, just because they say, I'm here to help you doesn't mean that they are. Yeah. Right. And so that's part of our educational programs. At one time, I think our website said 120,000 acres represented

over 600 public meetings that we've done. And back then, we were doing three a week, trying to get ahead of what people were calling the oil and gas boom, just so landowners understood there was some value beneath their feet. Just like the coal that got mined, a lot of that money left the Ohio Valley. A lot of that money went into Pittsburgh. A lot of that money went to New York. We don't want that to happen to oil and gas. And thankfully, we've had, since we've been involved, I think you probably go to 2010,

so let's say 14 years, over $95 billion has been invested in the oil and gas business, just oil and gas business. People were talking about how important that the Intel plant is coming, and Intel and Google are coming to mid-Ohio, which is just not too far from here, out 36 and 16. But that's a $25 billion investment. We've invested four times that. And if you look at the tax that's coming back into the communities, I've got some figures here that I wrote down so I wouldn't miss out on it. But just tax base alone in 2021 so just i'll just take one year out okay 57.6 million dollars in taxes were

paid to seven counties in eastern ohio in oil and gas tax really one year wow Over the time, and we're going to call it a 10-year period, 2014 to 2024, estimated at $364 million in what we call ad valorem taxes. When these guys were coming in, a lot of people didn't know what ad valorem was. My county, your county, Harrison County, was struggling to pay their bills, struggling to keep the lights on. We are now so blessed in Harrison County. Yeah, no doubt. Thanks to oil and gas.

Yeah, I was going to make it a point to ask you about that. The kind of, I don't know if prosperity is the word, but, you know, the opportunities it's unlocked for small areas such as Harrison County. And you look at what happens, you know, on the hill with the school and everything like that. It's just incredible. And if you could, if you have, you the hill with the school and everything like that. It's just incredible. And if you could, if you have, you obviously know way more about this than we do. But, like, detail that process.

You know that, you know, you've mentioned oil and gas and the investment. And, you know, it's a good thing for a community and all these millions of dollars and everything. But kind of detail how that actually works and what goes into all that. So if you're a speculator of minerals, first of all, you have to understand, is there an actual reserve of minerals beneath the ground? So geological studies. The geological studies dates back to 1903. I think Ohio's had a very good track record of geological research because of our coal. But over time, technology has gotten so much better where we can do a 3D seismic and we can

tell exactly what's underneath us. So hydrocarbon wise, I think we estimated 214 trillion million cubic feet of natural gas available. So is that worth going after? Yes. So how do we do that? Well, you first have to lease the land. So you have to engage the landowner, in some cases may not be the mineral owner, because in a coal area, some of that's got severed away from the land. So you go to the county courthouses. Back when it started, most of our counties were not online.

You would have to research book after book, page after page. I remember doing research in 2010, 11, and 12 in Tyler County, West Virginia, where we were getting charged $1 per iPhone photo of their old books because we were handling their books and touching the pages. We couldn't copy them, couldn't take the pages out, so you had to take an iPhone picture, $1 a page. Wow. So we were running about $400 day rate for three land men working at courthouse. Now it's one of the highest grossing counties in the state of West Virginia, thanks to oil and gas.

So the technology with the land search first, that's how it starts. Once you've searched it, you find who the mineral owner is, you go and offer them, solicit them for a lease. And they lowballed a lot of people. I remember, like it was yesterday, in Hopedale at the fire hall, the county farm bureau from Jefferson and Harrison got together. Because back then, the farm bureau, by golly, if you were a landowner, you trusted what the farm bureau said. So they had this meeting, and they had a guy by name Arnold who was their oil and gas policy leader and a couple ODNR guys. And they were talking to the crowd about, hey,

this is something's happening here. They're offering $250 an acre to lease land. You know, you better be prepared for this. So we're sitting in a crowd just like everybody else. And it was an overflow crowd. And they had passed out index cards to put questions on. And so one question was asked, said, okay, I've got this offer from Chesapeake for $250 an acre and 15% royalty. He says, is this a good deal? So Dale Arnold said arnold said 250 he said how many years is that the guy said was a five-year lease he said that's 50 bucks an acre per year he said i would sign that lease tomorrow just make sure you get a free gas clause and get it up to 300 000 mcfs so i stood up and hollered you people have no clue what you're talking about.

No clue. So that's where the education part that you talk about comes in. So we went into triple, ten times mode to educate people because even the people running the meetings had no clue. So their comment was, when I said, listen, this is wrong. Well, Jim, that Marcellus shale doesn't come too far across the Ohio River. In fact, we think it peters out right here about the Steubenville, Hopedale line, you know, Jefferson-Harrison line. I said, it isn't the Marcellus. This is the Utica Point Pleasant. It's a different formation. And one of the engineers from the ODNR said, what's the Utica?

So then we knew. Here's Farm Bureau that the landowners trust telling people that that was a good idea. So it was like, this isn't even close. Because by then, we had already been signing in Pennsylvania, Wyoming County, we had a 6,500 and an acre 20% deal with a landowner group. So we knew the education needed to come and we've been fighting that battle ever since, but people got to sign a lease. So that getting back to your question, once the lease is signed,

if you get enough acreage, you can put a drilling unit together. In 2011 and 12, we were drilling 640 acre units. Eight wells with lateral length of about 4,500 feet. Today, we're drilling four mile laterals. Oh, really? 20,000 foot laterals. And so you have a extremely low footprint but you can drill out 1200 acres from one pad in one direction with four wells and most of these pads are going both directions

northwest southeast but the the it all starts with a lease you can't drill you can't produce minerals you can't mine coal you can't mine stone without a document, a lease. A lease is a real estate document between a leasee and lessor. That's where we come in as a land brokerage, homeland real estate, where we focus on that. of what moms started back in the 60s fighting for coal rights and contracts understanding what you really own what the value beneath your feet is not just your house value your land value but your mineral value so it was a perfect fit for us and 16 years later we're still doing it yeah and that's where i think it's interesting because you're obviously a proponent of energy and all this, you know, the good things that it can bring to a community and especially what it's done for the Ohio Valley, but you're also on the side of the people. Oh, which is very

rare. Yeah. Yeah. I mean, I like how you kind of, you put yourself on both sides of this because you want the good that comes with the, with the energy, right? You also want, you don't want the people to get ripped off. You mentioned them getting lowballed and it's just you know so it's a matter of education i guess you know people are getting lowballed and they don't know what is the value beneath them and that's where you come in and you tell them you know this is actually worth a lot more if we could get some negotiating uh power here you know then it could be a really good deal for both sides yeah so from from that taking that we we started forming landowner groups. There's power in numbers. We had a landowner group in Kershockton in Muskingum County in 2014 that was 43,000 acres. A large group to handle. I can remember having

big meetings at, I think it's called Tri-Valley, the big high school in Dresden. And at that time, Lawner Burgers was still a big deal. And I said at a public meeting, this will be bigger than anything Lawn and Burgers ever thought about doing. And people thought I was nuts. But the bottom line is educating the people. And that's the same thing, in my mind anyway. We named one of our companies 250 pioneer that's the same thing our ancestors did when they came through this area and found this beautiful valley that they fought to get here on

we're going to protect it yeah and we don't need outsiders back then the indians were probably saying who are these pioneers you know and they're kicking us out of our land well we we fought you know have fought for it ever since so why would we let other people come in but that being said we want them here because i cannot extract those minerals without the technology yeah and the operators who have the technology to get it out of ground to get the oil and gas and produce it. So it's a working relationship, but at the same time, standing our ground and making sure that everybody's treated fairly. And then at the same time, we put in protections for the environment. You know, surface use, water use, you know, what rights do we have? That comes back to the real estate.

What's the value of my house if I'm going to sell it? We do the valuations on the minerals. Okay. So talk to me about how the taxes that you mentioned, how that gets invested or imbursed into the community that comes from a, so I'm guessing that, you know, a company comes in and wants to drill or wants to, you know, extract whatever mineral. And from that, they have to pay a tax to do that. That goes then to the surrounding counties? In some counties, I'm working in Tuscarawas County right now, some counties do not have an ad valorem tax.

I'm saying this, and people in Tusk County may get mad sometime, but it's a great tax base. You tax it based on the value of the mineral being produced. So oil and gas companies have to pay for transportation because there's got to be pipeline that moves the gas. The pipeline companies pay a tax. It's not a heavy tax by no means because the amount of capital that's generated. But what's it doing?

It's building roads. that's generated. Yeah. But what's it doing? It's building roads. It's building school buildings. It's bringing back trails, parks, recreation. We had a company here the other day that donated to a local 4-H fund, helped them build a brand-new horse barn on their fairgrounds. Firefighters, police, all first responders have benefited from it, from donations and or training. We just had a fire safety training facility put in a small town of Antrim,

Guernsey County. Volunteer fire department got helped out by oil and gas. Roads being paved that never were paved before. New culverts, new bridges. Probably the biggest thing we overlook is the upgrade of the electrical grid. AEP has upgraded right away after right away, power station after power station, because the ultimate use for all of these hydrocarbons that we're producing is to generate electricity. Yeah.

Right. You know, we've got a, I guess we call it a mantra that we promote. It's called, we innovate, not eliminate. It's on all of our business cards. And people ask me, well, what does that mean, we innovate, not eliminate? Well, we don't want to get rid of coal and power generation, but we can innovate. We can find new uses for coal, and we can replace those coal-fired plants with natural gas-fired plants. Intel's here is because of AI and artificial intelligence, which there's no greater demand on the grid than AI for electricity.

So what do you need? You need data centers. Data centers need electricity. How are we going to generate it? So all these hydrocarbons have a purpose. And the cheapest, because I'm going to go back to some stats. When I started this, we were at two BCFs a day. That's what we produced in the Appalachian Basin. Today, 16 years later, we're producing 38 BCFs.

The demand when it was at two in Appalachia was 18 BCFs. So we needed to drill to meet our demand. We soared past that in 2014, just flew by it. I can remember being at a rally at Ohio University Eastern, which with now President Joe Biden, he was running in the primary. And we were talking about coal and how Wayne L. Hayes, who was congressman of the 6th Congressional District, Belmont County, Wayne L. Hayes back in the 70s, had promoted as the chairman of the

Ways and Means Committee. Joe Biden had said, you know, we got to have an alternative. We got to find a better use for coal, but we also, natural gas is that bridge fuel. And then 07 was talking about that being the bridge fuel. Well, today it is the bridge. But at the same time, technology's got so far, hydrogen has come about as the bridge fuel with natural gas. And if you guys aren't aware of it, one of the best and biggest projects in our area that's came from all of this development is the ARCH-2,

the Appalachia Regional Clean Hydrogen Hub. So Arch 2 is going to be maybe 16, maybe 20 separate projects, multi-state, that has come from all of this land leasing, all the development. Because at 38 BCFs, we now have an oversupply. When you have an oversupply, the price goes down. We have the cheapest natural gas in the world. So, Wendy, you had asked me what we may talk about is why would people come here.

Because it's the cheapest natural gas in the world you can build your manufacturing center right on top of the raw materials that you need to build it so so during let's say it sadly during covid we realized as a country we don't manufacture things anymore we're too dependent on the shipping lanes and foreign countries to give us what we want. The computers, the microphones that we're talking into now come from a very simple source, coal and natural resources. China's been buying our coal for years. What do they benefit on? Rare earth elements, REEs, creating the chips for our computers. Those chips, yes.

All right. So when you start talking about that, now all of a sudden you're realizing, if I'm going to build, I'm going to build in the Ohio Valley. I'm going to build where the raw materials are. So an organization started down in Marietta called Shale Crescent. Now, if you haven't talked to the Shale Crescent guys, you got to. They're one of the best promoters of the Ohio Valley and our hydrocarbons. Well, they've done studies to say that if this was a state, if Western PA, Eastern Ohio,

Panhandle, the Ohio Valley, if we were a state or a country, we would be the third largest country producing of oil and gas, only behind Russia and the rest of the United States combined. Wow. That's how big this is. Excuse me. That being said, you should come here to start your business. Exactly. You should build here.

You've got the work ethic of the pioneers. You've got the mentality of community. We haven't even started to talk about the beauty of the Ohio Valley. That's right. The rivers. Now, you think about coming across the Alleghenies, coming from the east, head, and west. Nobody had been here before. And the huge timber.

And you come to this massive Ohio River. One of the best arteries in the United States of America. Sure, yeah. We fought wars over it. Yes, we did. All right. The Louisiana Purchase. Think back to 1803 in Louisiana.

Well, you can't get to the New Orleans without the Ohio River. That's right. All right. You can't ship goods. So I think it was 2019 at a meeting up at Ogilby. We called it Access to Capital where we talked about the mid-Ohio Valley and the amount of shipping that's on the Ohio Valley. Number one port, mid-Ohio Valley, in the country as far as moving goods.

And so you start looking from the hook above Pittsburgh all the way down to Ironton. We could go clean to Louisville, but how much commerce is on the river? And so there was a study done by a national company that said, where do you see the growth in the United States? Well, the Ohio Valley. They used Weirtonton they used wheeling as the center talking about a hundred thousand jobs to be created we're forecasting that now to two hundred thousand jobs wow all right you guys are seeing it here in wheeling and how much revitalization is going on the streetscapes projects yeah you know all the money that's being invested. Now, there was a huge infrastructure bill federally that is benefiting all of us. All right, that's coming back into the communities.

We saw a little bit of that from the oil and gas guys that started. We talked about Harrison County benefiting. All the counties have benefited. Belmont, Monroe, the data centers that are going in down at the old Ormet plant. Just there's so many great things going on. But the reason to settle here, I'm going to go straight to it. Well, wait. We'd like to stop you real quick.

Hold on. Hold that thought. We'll leave that as a cliffhanger for the listeners. We're about out of time for this first episode, but stay tuned. There will be a part two. Jim Millison's got a ton left to say. I can see it in his eyes. He's got so much to tell us. If you have anything you'd like to hear us talk about or anybody you'd like to hear come on, you can reach us at ouepodcastatohio.edu.

This has been Jim Millison and Wendy Anderson. I'm Drake Watson. Thank you for listening.