Other Ohio counties seeking benefit from boom
ZANESVILLE, Ohio — As drillers tap the natural gas reserves beneath Ohio’s easternmost counties, community leaders to the west hope to pump some of those profits into their own economies by developing ancillary industries.
Ohio Rep. Adam Holmes, R-Nashport, met recently with representatives of JobsOhio and the Appalachian Partnership for Economic Growth to discuss ways that counties adjacent to the Marcellus and Utica shale region can capitalize on the activity that is taking place there. At the Zanesville meeting, Holmes said counties such as Muskingum — which lies just west of Guernsey County and within 50 miles of many parts of Noble, Monroe, Harrison and Belmont counties where much of the drilling is taking place — are ideal locations for support services related to the industry.
Holmes suggested that because of its central location less than an hour east of the state capital and along Interstate 70, Muskingum County is a suitable spot for trucking companies to set up maintenance and repair facilities. He said the location is also ideal for pipe yards and manufacturing and storage for pipelining companies. He pointed out that the flatter terrain of Muskingum County, as opposed to the rolling hills of the more eastern counties, means it is easier to construct large buildings and facilities there.
He referred to his legislative District 97, which includes Guernsey and Muskingum counties, as a “downstream area” in connection with the industry.
Dana Saucier, vice president and head of economic development for JobsOhio, explained that drilling and production are “upstream” operations, while “midstream” activities include processing the hydrocarbons that are drawn from the ground and transporting them to market, often via pipeline.
Downstream operations include those that use the natural gas and related products such as ethane and propane in manufacturing, producing things such as plastics, chemicals, electricity, carpets and textiles, medical devices and more.
Saucier said over the past nine years, the gas and oil industry has invested $75 billion in the Buckeye State, and he anticipates much more investment in the future.
“Now we think the best is yet to come,” he said. “A lot of jobs will come. (Downstream operations) are more people-intensive. Workers need to be highly trained.”
Matt Cybulski, sector director for JobsOhio, called Harrison County the “midstream hub” of the state. He said companies such as MarkWest Energy have invested $12 billion to $15 billion in fractionation plants and other processing facilities there over the past six to seven years. He said as natural gas-fueled power plants increase in number across the region — and if PTT Global Chemical America and Daelim Industrial Co. opt to build a proposed ethane cracker plant at Dilles Bottom in Belmont County — such investment will continue to grow.
Holmes said it is a natural progression for ancillary industries and “support clusters” to rise up in areas surrounding regions where a natural resource boom is occurring. He said as the number of related jobs increases, so will the need for restaurants, gas stations, housing and more.
“It will change the tax base as the demand for services increases,” he said.
He cited Peterbilt as one company that sees the potential of setting up shop in Muskingum County. He said the big truck manufacturer has a warehouse and dealership there, including a maintenance and repair facility. And, he said, it is even making a specialized hitch for use on the rough terrain of gas and oil country.
Zanesville is becoming something of a transportation hub, with the Freightliner and Kenworth companies also dealing in big rigs there. Situated just about 11 hours from the East Coast, many over-the-road drivers departing from Zanesville can reach some port cities within a single day.
Cybulski further pointed out that a “regional focus” is important, since plenty of related gas and oil development also is taking place in Pennsylvania and West Virginia.
“So while we want to win projects within Ohio, we realize the regional impact,” Cybulski said. “We can have more success together.”
Holmes noted that legislation being developed in Columbus “has an eye for this.” He said lawmakers are looking for ways to support business development, which makes him happy since he is a business owner, too. He said seeing the tangible impacts of this mindset gives him more motivation as a business owner.
Holmes added that the recent fuel tax increase in Ohio was implemented with an eye toward the increased presence of the trucking industry in the future. The 10.5-cent per gallon tax hike on gasoline and 19-cent per gallon increase on diesel fuel took effect July 1.
State Rep. Jack Cera, D-Bellaire, was not present for the meeting but later agreed with Holmes. He said he hopes the fuel tax increase will help fund some of the infrastructure improvements that would be necessary to meet the demands of the potential cracker plant and related development.
“Ohio needs to make sure we’re ready to have the infrastructure prepared” for the possible PTTGCA/Daelim project, Cera said. “We made the investment by asking the taxpayers to pay more, and hopefully that investment pay off.”
Holmes said a key to the state’s economic future will be legislators’ ability to work across the aisle.
“He’s a Democrat, I’m a Republican, but he has been so kind to me and he’s helped me so much,” Holmes said of Cera. “Our objectives are the same. It’s taking care of people in this area.”