ST. CLAIRSVILLE - As only one of the several companies working in eastern Ohio's Utica Shale, Rice Energy has already paid more than $250 million to Belmont County mineral owners for signing natural gas drilling contracts.
Throughout the Upper Ohio Valley, Blue Racer Midstream, Williams Energy, MarkWest Energy and M3 Midstream have invested more than $9 billion for infrastructure to move Utica and Marcellus shale natural gas out of the region.
Nearly everywhere one goes, hotels are full, new businesses are opening and colleges are enrolling students in new programs designed to meet the needs of the burgeoning oil and natural gas industry. The Ohio Valley is finding itself on the road to a financial revolution through the billions being invested by the natural gas industry.
Rice Energy has paid more than $250 million to Belmont County property owners for signing natural gas drilling leases. The company helped establish the Smith Goshen Rice Enrichment Fund to benefit the county. Seated from left are John Mandich, Land Manager for Rice’s Ohio operations, Fund Committee members Lova Ebbert and Neil Rubel, and Misty Kidd, Land Specialist for Rice. Standing from left are committee members Gabe Hays and Larry Cain.
D to the number of natural gas industry workers frequently spending the night at the downtown Wheeling McLure Hotel, frack trucks often park along Market Street.
A small village of oil and natural gas related businesses is springing up along National Road west of St. Clairsville at the former Green Barn and Jack's Floral and Garden Center site.
From a business selling supplies for field workers to a company looking to invest in mineral rights, the shale rush is leading new business development in the area. In opening her Oil & Gas Safety Supply store inside the former 3,000 square foot Green Barn last year, owner Amy Savage believes working in the Ohio Utica Shale be productive.
"I am originally from Michigan, but I moved to Washington, (Pa.) while working in a safety role for a gas company," Savage said. "I couldn't find the supplies I needed, so I decided to open my own store."
Also in St. Clairsville, Dublin, Ohio-based Hull & Associates is now officially open across the street from the Belmont County Courthouse.
"The shale oil and gas rush can increase the viability of brownfield projects," said Hull CEO Craig Kasper.
Over the past year, the 85-room Microtel Inn and Suites by Wyndham that opened near the St. Clairsville Hampton Inn, as well as the new 55-room Comfort Inn along National Road between St. Clairsville and Blaine. The demand for Belmont County hotel rooms is high because of the oil and natural gas industry workers in the area, as a new 76-room Days Inn & Suites is nearly complete directly across from Union Local High School in Morristown.
In Ohio County, the new 123-room Hampton Inn & Suites is now open at The Highlands, as are the Microtel Inn & Suites and the 120-room Suburban Extended Stay Hotel. All of these properties are housing workers employed in the oil and natural gas industry.
Also, long-time existing hotels such as the Hampton Inn properties in St. Clairsville and along National Road in Wheeling, as well as the historic McLure Hotel in downtown Wheeling, are frequently filled to capacity to accommodate those working on pipelines, processing plants, or well sites.
Rice recently donated $25,000 to help establish the Smith Goshen Rice Enrichment Fund, which will allow those who contribute to both reduce their tax burdens and ensure a brighter future for Belmont County.
Although Rice started the fund, anyone is eligible to participate. Residents who are receiving checks from shale companies may elect to donate some of their money to this fund, according to Susie Nelson, executive director of the Community Foundation for the Ohio Valley.
"We are encouraging anyone who may want to contribute to the well-being of Belmont County to consider making a gift of any size to the fund. Marcellus and Utica shale are providing our region with new wealth never before imagined. It is important to consider how this new wealth can create a legacy that will last and continue to be a benefit to this region for years to come - even after this gas boom is over," Nelson said.
The fund is designed to allow individuals to create a long-term fund that will benefit Belmont County. Once a large enough pool of money is raised, grant applications will be available for nonprofit organizations in the county.
"Rice is happy to be a part of the foundations and pleased to make a $25,000 commitment to support the Belmont County community," said Toby Rice, CEO of Rice Energy. "I can't stress enough how important this is to the community. This foundation is going to generate a tremendous amount of good will."
In addition to Rice's donation, Chesapeake, Chevron, Consol and numerous other oil and gas companies have donated thousands of dollars to local schools and charitable organizations over the past few years. Overall, financial experts see the shale industry, along with other factors, as a strong positive for the region's economic growth.
"It's been a low interest rate environment that has helped many consumers to improve their finances," said George Mokrzan, director of Economics for Huntington Bank. That reduced debt obligation, in fact, may be the lowest its been since the 1980s, at least by some measures, Mokrzan said. Mokrzan said consumer wealth levels also are on the rise. Both signal positive things for the economy. As a result, auto and home sales also are seeing an increase.
Mokrzan is director of economics for Huntington National Bank, providing economic analysis and commentary to management and clients. He also is a panelist for the Federal Reserve Bank of Philadelphia Livingston Survey and serves on the CNN MoneyEconomist Poll.
Jeffrey W. Wagner, senior vice president and chief investment officer at First National Bank, was equally confident with the continuing market growth.
Economic and financial experts who discuss the region's outlook rarely fail to mention the impact natural gas and oil drilling is having on economic growth and energy independence for America.
Mokrzan and Wagner were no different.
"The energy area is looking quite robust," Mokrzan said. "For over two decades primary energy production in the U.S. has been flat, and then all the sudden since the recession, it seems like it just turned up. It's up 25 percent. It looks like fracking is having a huge positive effect on energy production, that's benefiting our area.
"The drillers that get the natural gas, they need the infrastructure, they need the pipes, they need rail cars, they need processing, and these are all leading to multiplier types of effects," Mokrzan said.
Mokrzan also believes that, particularly among manufacturing areas, northeast Ohio is emerging well from the recession, also likely triggered by the need for equipment and infrastructure tied to Marcellus and Utica Shale play.
Wagner agreed with the assessment.
"You can't just pull oil out of the ground and ship it out. We need infrastructure," Wagner noted. "It's really slowed things down here. Some people are disappointed our unemployment didn't go from 7 percent to 2 percent (overnight), but it's given us a benefit of time for training our people."
In January, Frederick S. Coombs III, chair of the creditors rights and bankruptcy law practice group at Youngstown-based regional law firm Harrington, Hoppe & Mitchell, noted that the northeastern Ohio Shale boom also is helping to improve the potential for creditors to collect debts.
"Lease-signing bonuses and royalty payments represent new assets for creditors to pursue," Coombs said. "Some debts that once appeared uncollectible may now be worth pursuing, thanks to the rise of oil and gas activity."
Examples, Coombs said, including mortgage lenders that are seeing borrowers pay off delinquent mortgages and other large debts after borrowers receive signing bonuses or royalty checks for local mineral rights.
"There are new and creative mechanisms for getting large debts paid," Coombs said. "Our experience suggests that an energy company dedicated to signing a lease can be an effective partner in getting an old debt resolved."