YOUNGSTOWN, Ohio – Steve Kilper makes it a point to visit his company’s Class II injection wells along state Route 169 in Weathersfield Township at least three times a week, even though the operation has been inactive for nearly 10 years.
“We laid the employees off and shut down in August 2015,” he says as he opens a gate entering the complex. Kilper, the vice president of AWMS Water Solutions, says he examines the site for any signs of oil sheens or leakage.
So far, so good. The next task is to replace some pressure gauges at the well site.
“They’ve done a great job keeping this in good shape,” Kilper says, noting he’d like to see the wells in operation once again.
Overall market conditions in the oil and gas industry have improved, drawing more attention and need for injection wells to dispose of contaminated wastewater produced from drilling operations. The market – especially in the Mahoning Valley – is also attractive to larger interests looking to acquire these wells, as evidenced by recent transactions in Trumbull and Mahoning counties.
Just when AWMS’s well could be reactivated or placed up for sale is anyone’s guess. Since 2015, the company has been locked in a legal battle with the state of Ohio over the well. A year earlier, the Oil and Gas Division of the Ohio Department of Natural Resources ordered one of the wells closed after small seismic activity near the deeper of the two wells was detected. The first of these was a 1.7-magnitude earthquake recorded July 28, 2014. A month later, a 2.1 magnitude temblor was reported, prompting the order to shut it down. The Ohio Oil and Gas Commission subsequently upheld the decision.
The closure hasn’t deterred AWMS from pressing its case to reactivate the wells and collect monetary damages that it claims it is owed because of the closure.
“Most people would have given up a long time ago,” says Ron Klingle, chairman and CEO of Howland-based Avalon Holdings Corp., the parent of AWMS. “We lost a business that we invested $7 million in. We’re not going to give up,” he vows.
A Legal Matter Times Two
AWMS today has two separate legal matters tracking through the courts. The first is a case that originated in Franklin County Common Pleas Court challenging ODNR’s decision to shut down the well. The second is a mandamus action now before the Ohio Supreme Court that alleges that ODNR “substantially interfered” with the company’s property rights, depriving AWMS of the property’s economic value and use.
AWMS has argued in the Franklin County court that the oil and gas division’s order lacked scientific justification to close the well, reiterating that any seismicity amounted to “background readings” that are routinely detected across the state. Although Judge Kimberly Cocroft agreed there was no reasonable cause to close the well, ODNR in June 2022 imposed new rules and conditions that Klingle says makes it impossible to restart operations.
These regulations include a provision that states the well would be forced to close again should another earthquake with a magnitude of 2.1 or more occur within three miles of the operation.
“It makes no sense for us to even begin operating the facility again under those conditions,” Klingle says. “If we accept it, and another background reading for the state of Ohio happens, we’re out of business.” A shallower well at the site remains inactive by choice, Klingle says, since it is not economical to operate without commissioning the deeper well.
Moreover, these restrictions have also jeopardized any potential sale of the facility, Klingle says.
“These wells are in great demand,” he says. “But nobody’s going to buy it based upon the condition that if a background reading occurs, you’re out of business. So, they’re not going to pay us what it’s worth.”
According to court papers, AWMS has proposed what it believes is a more reasonable solution that would include a yellow warning light triggered at a 2.35 magnitude earthquake, requiring the well to reduce its injection pressure to 1,350 pounds per square inch and lower capacity by 10%. A red warning light would be triggered if a 3.0 quake is detected, requiring the well to close for 20 days and then resume injections at 20% below capacity and reduced pressure.
AWMS initially appealed, but Judge Cocroft denied the action, citing the court lacked jurisdiction because the filing was not timely. The case is now before the 10th District Court of Appeals. The Supreme Court matter is now in mediation, but Klingle expects this measure to be remanded to the 11th District Court of Appeals and a new trial. “We’re ready to go back,” he says. “We’re going to win.”
When contacted for a response, an ODNR spokeswoman said the office does not comment regarding pending litigation.
Demand in the Mahoning Valley
Should AWMS reactivate its well soon, it would come at a period when the market for injection wells across the region is relatively hot. Those that couldn’t turn a large enough profit in the industry have put their wells up for sale.
And there are buyers, says Bob Barnett, president of American Energy Associates, Cortland. Barnett and his investors at one time owned and operated three injection wells in or near the Mahoning Valley: two in Trumbull County and another near Windham in eastern Portage County.
“We just got out of it altogether,” Barnett says. He says regulations enacted during the administration of Gov. John Kasich continued through Gov. Mike DeWine’s administration with even more rules, making it difficult for a small operation to make money. Ohio, for example, adds a 20-cent surcharge on every barrel of wastewater coming in from out of state. Since the Mahoning Valley is so close to the Pennsylvania border – and there are little to no disposal wells in the commonwealth – injection wells in Mahoning and Trumbull counties receive more out-of-state wastewater than is generated in-state, he says.
“We sold our Windham and Greene [Township] wells to Cambridge Energy out of Pennsylvania,” Barnett says. “They were our main customers here,” he says, noting the company would transport its wastewater to the site and decided to vertically integrate and acquire its own disposal wells.
“Most of our investors got their money back,” he adds. “We didn’t make a killing, but we had a ball.”
Barnett says American Energy was successful in selling its third well, the Hray-Mullinax #1 well in Brookfield, to Select Water Solutions in 2024, a company that has made a major acquisition push in the region.
Select has also acquired two injection wells in Newton Falls, and two of Bobcat Energy’s wells in Mahoning County, which consist of a major injection well in North Lima and another one in Coitsville Township. Select, based in Gainesville, Texas, has in addition acquired Bobcat’s position on a lot in Hubbard Township where Bobcat was considering a new well.
In February, Highland Field Services sold its injection wells in Brookfield along state Route 7 to SWS Holdings LLC. According to the Trumbull County Auditor’s website, Highland sold the 77.5 acre-site for $1.75 million. That transaction price does not include the rest of the business.
On average, Avalon’s Klingle says the value of an injection well is approximately $15 million.
Seismic Concerns
AWMS constructed the Weathersfield injection well complex in 2014 as oil and gas exploration exploded across the Utica/Point Pleasant shale play in eastern Ohio and the Marcellus shale in western Pennsylvania and West Virginia. Class II injection wells collect contaminated wastewater generated from drilling operations and then discharge the water deep into the ground for permanent disposal. ODNR reports there are more than 200 of these wells across the state of Ohio.
These wells have caused major concerns among residents of the Mahoning Valley, especially after a 4.0 magnitude earthquake – found to be triggered by an injection well in Youngstown at the Ohio Works Industrial Park – ripped through the region in 2011. That well – the notorious Northstar #1 then owned by now defunct D&L Energy – was closed and is now dismantled. Other wells nearby were also shut down, while those located further away – the Coitsville and North Lima wells, for example – were allowed to remain in business.
In all, ODNR lists 10 injection wells in Trumbull County and six in Mahoning that are regularly inspected.
According to an inspection report filed on June 27, 2024, Select’s Northstar Lucky 4 well, just off state Route 7 in North Lima, was ordered temporarily shut down for exceeding the amount of maximum allowable injection pressure. Once pressure was readjusted, the well was allowed to resume operations the following day. Ohio regulations state that a well could be shut down for 24 hours for exceeding pressure limits if it’s a first offense. A second offense within 365 calendar days would draw a 14-day suspension, and a third offense a 30-day suspension. A fourth offense within that period would force a revocation of the well permit.
In Trumbull County, inspectors responded to a wastewater spill at the Greene Township well in September 2023. The spill occurred after a hose from a brine truck ruptured at the offloading pad, releasing between 10 and 15 barrels of contaminated wastewater, records show.
And in 2022, water tested outside the fencing of the Northstar Collins well in Coitsville was found to contain chloride that exceeded allowable levels, according to another inspection report.
Meanwhile, all is quiet at AWMS’ injection well in Weathersfield. Inside the fence, a large holding tank is bracketed by tall vertical cisterns. These tanks contain fresh water today, creating enough weight to prevent them from toppling over in the event of tornado-force winds.
Activists such as Lynn Anderson of Youngstown would like it to remain that way. She says the well is just three miles from the Meander Reservoir dam and she’s concerned that any seismic disturbance could further damage it. “The dam was cracked up from the 2011 earthquake,” Anderson says.
AWMS’ Klingle is nevertheless determined to see his plans for the well site move forward. “We’re going all the way with it,” he says.
Pictured at top: Steve Kilper stands in front of the Weathersfield injection well, which has been shuttered since 2014.