Oil and gas firms spent $300M on local roads

Photo Provided by Michael Strough Heavy trucks traveling to and from natural gas drilling sites like this one just outside Belmont damage local roadways, but those companies are paying large sums to make repairs.

MARTINS FERRY –Hundreds of millions of dollars’ worth of road improvements have occurred in Eastern Ohio since 2011, thanks to investments by natural gas and oil producers.

On Tuesday, the Ohio Oil and Gas Association and Energy in Depth Ohio hosted a statewide media call releasing the findings of a new report regarding road improvements made by oil and gas companies in the Utica Shale play.

The study found that the major upstream oil and gas exploration and production companies has spent more than $300 million in eight Ohio counties from 2011 to the first quarter or 2017, improving more than 630 miles of roads with those investments. The report examines road use maintenance agreements across Belmont, Carroll, Columbiana, Guernsey, Jefferson, Harrison, Monroe and Noble counties and is the second of its kind in an ongoing Utica Shale Support Series between OOGA and EID Ohio that collectively analyzes multiple ways in which the oil and gas industry directly benefits schools, counties, cities, townships, villages, services and infrastructure.

Earlier this year the first report found that Ohio’s oil and gas operators contributed more than $43 million in six counties over five years as a result of property taxes paid on crude oil and natural gas production. OOGA Executive Vice President Shawn Bennett said he expects the industry to provide an estimated $250 million more in property taxes over the next 10 years in Utica Shale counties.

“The oil and gas industry is providing tremendous benefits, and we are very happy to provide them,” Bennett said.

Jackie Stewart of EID Ohio conducted the research for the report and said it is a first of its kind because previous research only used estimates to calculate the cost associated with road repairs by oil and gas companies under RUMA agreements. Stewart said gathering the data was challenging due to lack of a central clearinghouse for this type of information.

“This report was tough. God bless the county engineers that collected the data about the number of miles that were repaired, but they were not able to tell us how much money was actually spent by the oil and gas companies. That number had never been quantified until now,” Stewart said.

Stewart said EID and OOGA used the Freedom of Information Act to obtain all of the pertinent data. It was found that the industry ended up paying contractors more than the original estimates for the repairs, and often went beyond what was expected from them to upgrade the roads they use. She also found a “direct correlation between more oil and gas industry development and more road repairs.”

“Besides being an economic boom for eastern Ohio, the recent oil and gas activity has fostered millions of dollars of road improvements that have been much needed but unaffordable to cost strapped local government,” noted Columbiana County Engineer Bert Dawson.

Stewart also pointed out that a recent Ohio University Voinovich School of Leadership and Public Affairs study found that “almost all interviewees stated that county roads under the purview of a road use maintenance agreement were left in better condition than they were before the introduction of the industry.”

Stewart said the state of Ohio has a “unique” history with RUMA development, and that it began to develop in eastern Ohio after the industry started to spread from Marcellus Shale development in Pennsylvania in 2011 and 2012. She noted that after 2012 when the Ohio General Assembly passed Senate Bill 315, RUMAs were required for all permits issued for oil and gas exploration, drilling and production by upstream companies. Shortly after that, Ohio Attorney General Mike DeWine issued a 20-page set of guidelines for communities to use to interpret and enforce RUMAs with specific upstream producers.

“It has been such a successful program in Ohio. There really has been an unprecedented amount of cooperation between communities, state and local government and the industry to make it benefit everyone,” Stewart said. “Additionally, DeWine issued a provision in the RUMA guidelines that operators are required to use prevailing wage when contracting out for road repairs, which helps the trade unions.”

Amy Rutledge, executive director at the Carroll County Convention & Visitors Bureau, said Ohio has done a much better job than many states at staying ahead on road repair requirements and regulations that also have helped to improve the image of the oil and gas industry. She applauded the industry’s efforts in her county at making roads safer and wider, while providing opportunities for cheaper energy production via gas-powered power plants slated to be constructed in the area, as well as ethane cracker plants in western Pennsylvania and one proposed for Eastern Ohio.

“The oil and gas industry has not only helped roads here, but also jobs,” Rutledge said.