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Oil, gas boom coming soon to Ohio?Valley

September 2, 2012
By MIKE HUGHES - News Editor , Times Leader

MARTINS FERRY The oil and natural gas boom brought on by the Marcellus and Utica Shale is still in its infancy stages in the Ohio Valley, at least in terms of economic impact.

But that impact is coming.

Linda Woggon, the executive director of the Ohio Shale Coalition, attempted to relay that information to a gathering Wednesday afternoon in Martins Ferry, hosted by the Belmont County Shale Coalition.

Woggon, who is also the executive vice president of the Ohio Chamber of Commerce, gave a presentation attempted to summise the findings of an economic impact study funded through the OSC.

"Pennsylvania produced an economic impact study early in its Marcellus play," Woggon said. "We decided it would be a good first project for the Ohio Shale Competition.

"We started last summer to pull together data and make some assumptions and project economic impact for Ohio from there."

Woggon noted the study period ranges from 2011-2014, looking at only upstream and midstream benefits of the Utica Shale only.

In the OCS' estimation, the Utica play will be the more lucrative of the two considering the possibility to wet gas as opposed to the Marcellus.

The study team used conservative projections for all variables.

It used four major areas of investment for making its projections: leasing, royalties and right-of-way payments; road construction; drilling and completion of wells and midstream infrastructure.

Its findings projected the annual production of oil and gas from the Utica Shale growing to nearly $10 billion in 2014 ($9.6B).

The total value added to Ohio's economy will amount to $4.9B. Labor income is coming in just less than $3.3B.

By 2014, the study also projected more than 65,000 jobs will be created or supported. State and local tax revenues are projected in the nearly $434M range.

While Woggon noted the study didn't factor in any downstream economic impact, i.e. manufacturing, hydrocarbon consumers, etc. she did note that those figures should be part of the future updating of this study.

As the shale play further ingrains itself in the Ohio Valley, the researchers will have better, more solid numbers to base their projections on.

She did touch on a few downstream effects, explaining it will be a significant part of the overall positive benefits to Ohio.

"We'll see a rebirth in the manufacturing economy," Woggon said. "Shell is planning that cracker plant in Western Pa.

"A lot of companies are going to want to locate near that plant and will build new facilities and create jobs."

Woggon also touted the online database created for the 12 rural counties in Southeastern Ohio. This was created so producers can make their companies and information available online to industry members looking to hook up with suppliers.

The website is located at www.ohioshaleenergy.com and companies are encouraged to get listed in what is being called the Ohio Shale Supply Chain Database.

It's important to not only list what your company has to offer, but to make sure you know exactly what you have, how much and how quickly you can get more.

When those companies call, they don't have time to sit around and wait for answers, Woggon said. If you're not ready, they will find someone who will.

That's one of the unique opportunities/challenges posed by the shale boom.

Another, Woggon explained, is the upcoming rapid growth that will hit local communities.

"Some communities have struggled with the very rapid growth," Woggon said. "It takes revenue, ramping up safety forces. There is a lot of wear and tear on the infrastructure.

"We will have to get our arms around that issue."

Another problem is making sure there is a well-trained and available local work force to take advantage of the increased job opportunities.

Local technical and community colleges can play a major role in tackling this problem by providing targeted training and programs aimed at getting the work force ready.

Hughes may be reached at mhughes@timesleaderonline.com

 
 

 

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