Shale Industry Still Booming in Ohio

Feb 6, 2018 | News, Newsletter |

By Gilbert Michaud, Ph.D.
Assistant Professor of Practice, Ohio University.

Colton Smith.
Voinovich Research Scholar, Ohio University. 

Ohio has a legacy of coal mining, especially in the Appalachian region of the state, but a recent shale gas boom, in addition to energy efficiency programs and the increasing cost-effectiveness of renewable energy resources, has resulted in a decreased reliance on coal.  Natural gas production in Ohio has continued to grow in recent years despite falling production throughout the rest of the country.  This can be attributed to the prime locations and continued extraction of the Utica and Marcellus shale formations in Ohio, which began in earnest in 2012.  Both are sizeable national shale plays, and, in fact, the Utica may soon match the Marcellus formation in terms of production, the latter of which is the largest formation in the U.S.

Both the Utica and Marcellus shale booms in Ohio were, in part, caused by advances in hydraulic fracturing (i.e., ‘fracking’) techniques which allowed previously untapped natural gas to be extracted more easily.  To illustrate, in 2012, Ohio withdrew roughly 7,041 million cubic feet (MMcf) of natural gas per month, a figure that rose to 42,698 MMcf in 2014 and 121,430 MMcf in 2016 (a 1,600% increase over four years).  Ohio now accounts for over 5% of the U.S.’ natural gas supply, and new wells continue to be brought online.  Moreover, six new midstream gathering and processing facilities recently finished construction, while two new pipelines, the Rover and Nexus, are being worked on which will collectively transport 4,800 MMcf of gas per day in Ohio.

Further, there are 11 new natural gas plants currently in the planning or construction phases, which will cost an estimated $9.8 billion, and are predicted to produce power nearly twice as efficiently as current coal facilities.  This surge in natural gas production has resulted in the state GDP contribution from oil and gas activity to nearly triple over the last five years.  According to Ohio University research, Ohio’s shale industry employs now over 150,000 and contributes roughly $28 billion of economic impacts to the state.  In order, the top five counties by total shale-related economic impact per capita are Noble, Monroe, Belmont, Guernsey, and Washington – all of which sit in the Appalachian region.

Overall, whether shale employment growth will actually continue in Ohio will depend on the viability of continued drilling in the Utica and Marcellus shale plays and the presence of demand for oil & gas to match increasing production.  Regardless, the installation of new infrastructure (e.g., the Rover and Nexus pipelines) will enable Ohio’s economy to further capitalize on the state’s plentiful natural gas resources while this fracking boom cycle lasts.  There are numerous economic development and policy implications to consider moving forward with this industry in Ohio, but it remains apparent that the state continues to benefit from the financial and employment impacts of this unique resource to the region.  Smart planning and policy decisions, as well as workforce training, can help enhance this shale resource extraction boom while also progressing Appalachian regional poverty and mitigating any potential negative environmental impacts.

You can reach Gilbert Michaud at michaudg@ohio.edu or Colton Smith at cs029613@ohio.edu

USDA OSU Extension Small Business Innovation Research (SBIR) Grant Workshops

The USDA is seeking new technology and/or creative product ideas from grass roots innovators! Got a great idea? The USDA may be interested in funding the research and development of your concept! Ohio State Extension is partnering with the USDA to promote the accessibility and availability of Small Business Innovation Research (SBIR) grants. OSU Extension will be offering two (2) workshops, one in Northeast Ohio (Lorain County Community College on June 19) and one in Southwest Ohio (OSU Lima Campus) to orient interested innovators, researchers, and practitioners to this grant opportunity and the grant application process. Registration is open!

read more

2018 Annual Excellence Awards – Call for Nominations

The Ohio Economic Development Association’s annual excellence awards program recognizes the achievements of individuals and organizations in Ohio in the areas of economic and workforce development. Submit your nominations today and have excellence in your community recognized state-wide!

A panel of judges will assess the nominations, determine finalists, and select a winner for each of the categories noted below. Award winners will be announced at a ceremony during the OEDA Annual Summit to be held October 16-18 at The Renaissance Columbus Downtown. All award finalists and winners will be notified prior to the Annual Summit so as to make appropriate arrangements.

read more

Register NOW for Remaining 2018 Ohio Economic Development Institute Courses

Register Today for the Remaining 2018 Ohio Economic Development Institute Courses
OEDI is presented in partnership the Ohio Economic Development Association, JobsOhio, and the Ohio University Voinovich School.

Next Up for OEDI’s courses: Finance & Incentives July 19-20 and Business Retention & Expansion September 20- 21! Be sure to register early for these in-demand programs, as space is limited!

read more