|
|
The Suburbanite
  • New energy brings new outlook, opportunities to region

  • The gas and oil industry projects to drill 4,000 wells in the Utica Shale by 2015, wells that could produce for decades. The main activity so far has been in Carroll County, with business opportunities spilling over into neighboring Stark and Tuscarawas counties.

    • email print
  • Ron Carlton’s four-wheel-drive truck powered up the slushy hill, leaving behind a newly built well pad where Chesapeake Energy will drill under fields stubbled with small evergreens.
    Turning onto Avon Road, the recently retired tree farmer drove to where a rig was already probing for oil and natural gas on a neighboring property in the Scroggsfield part of Carroll County.
    “When drilling is complete here, it’s going to look like a checkerboard,” said Carlton. “Hopefully, everything will be able to be drilled and harvested.”
    With rigs crawling all over this part of the state, Carlton’s prediction seemed reasonable.
    The gas and oil industry projects to drill 4,000 wells in the Utica Shale by 2015, wells that could produce for decades. The main activity so far has been in Carroll County, with business opportunities spilling over into neighboring Stark and Tuscarawas counties.
    Unconventional drilling already supports 38,000 jobs in Ohio and last year added $4.1 billion to Ohio’s economy, according to a report by global research firm IHS.
    By decade’s end, the state could see 143,000 jobs and $18 billion in additional gross domestic product, while its industrial base benefits from producing metal and machines for drillers, according to the same study.
    But a lot needs to happen first.
    GETTING TO MARKET
    “It’s very hard to tell people to be patient, but they need to understand the amount, the billions of dollars in investment that is going on right now,” said Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program.
    First, the oil and gas needs a way to get to market.
    Work crews are steadily connecting pipelines. Cranes hoist steel beams into position for the new M3 Midstream processing plants in Kensington and Scio, both expected to be operational by June. Similar work is happening in Leesville and Cadiz.
    Delays in building that infrastructure could delay growth.
    There also needs to be a work force trained, not just to drill wells, but to maintain them for decades, a task being undertaken by institutions such as Stark State College and Marlington High School.
    “The employability skills, job expectations, those kind of things have to be addressed first thing to the students, so they know what they’re getting into,” said S. Kathleen Steere, head of Stark State’s gas and oil program.
    By 2035, unconventional drilling could employ 266,000 workers, 4.3 percent of the state labor force, a mark that would rank Ohio third in energy employment behind only Texas and Pennsylvania, according to IHS.
    REGULATIONS AND TAX
    Governmental regulation is another factor that could advance or hinder the pace of development.
    At the federal level, President Obama has talked about natural gas providing a bridge to cleaner power and greater energy independence, and has nominated an energy secretary seen as friendly to shale drilling.
    Page 2 of 3 - In Ohio, Gov. John Kasich has proposed increasing the severance tax paid by unconventional shale drillers, while reducing the income tax.
    The move is unpopular with gas and oil companies and some landowners, as well as residents in drilling-intensive counties, who want to see tax revenue used locally.
    Meanwhile, the alleged dumping of drilling wastewater in Youngstown has led to calls for greater environmental oversight.
    BOOM OR NOT TO BOOM
    If there wasn’t money to be made, and a lot of it, the industry wouldn’t be investing billions to develop the Utica Shale, proponents say.
    But Ohio has been through more than a century of drilling booms and busts — in the 1890s it was the country’s largest oil producer — and shale-drilling rushes have happened in other areas only to subside.
    Pennsylvania’s Marcellus shale region saw a frenzy of natural gas drilling five years ago. When the market price dropped, drillers shifted their attention to areas with more profitable wet gas and oil, such as Ohio.
    “In our area, it was obviously very fast and furious,” said Rebecca Burke, a Pennsylvania gas industry consultant. “It has slowed down. However, it’s probably currently at a pace that is more manageable than what it had been.”
    When drilling started, Burke was a commissioner of Lycoming County in north-central Pennsylvania, best known for Williamsport, home of the Little League World Series. Now, she works as a consultant on oil and gas issues.
       
    Drilling in Lycoming County has taken longer than expected, and companies probably didn’t find enough local workers for a variety of reasons, including the ability to pass drug or background screenings, or even the desire to work long hours in the elements, she said.
    But Williamsport has seen blighted properties rehabilitated, companies are still building pipelines and there are plans for a gas-fueled electric generation plant in an adjacent county, Burke said.
    “Are we a better community for it? I personally believe we are,” she said. “I think it’s given folks an opportunity to start businesses, grow businesses... Farmers can now afford to farm.”
    Shale drilling provides an opportunity that comes along only in generations, and Ohio can take lessons from Pennsylvania’s experience, such as the importance of good communication among government, community leaders and drillers, Burke said.
    “There’s enough in this for everyone to benefit from it, as long as people don’t get greedy,” she said.
    WHAT’S NEXT
    Local groups are paddling out to meet the expected wave.
    The Canton Regional Chamber of Commerce markets Canton as the Utica Capital and holds seminars on safety and development opportunities. The Stark County Oil & Gas Partnership is bringing together cities, chambers of commerce, labor unions and businesses.
    Page 3 of 3 - In Carroll County, officials are looking for new companies that can drive their economy when drilling subsides.
    But the real impact will be felt by the people who do the jobs, who drive the roads, who live near the wells. The ones who find their own wave to ride or get swamped trying.
    People like Cathie Allen, of Carrollton, who pays the mortgage by renting her house to oil and gas workers while she lives in an apartment.
    People like Bob Rea, a Columbiana County resident who turned his experience negotiating with drillers into a business, Buckeye Mineral Development, that helps property owners manage their mineral rights.
    People like the residents of Scio, who now live next door to a mile-long processing plant.
    People like Mike Saunders, who five years ago would have told you his idea of a significant economic development for the area was a Wal-Mart store.
    Saunders lives in Jefferson County, a former steel-producing region, and drives past new wells on his way to work at Vernon Dell Tractor in Carrollton.
    For years, eastern Ohio has seen its population steadily shrink and age.
    “Young kids are moving out to get jobs,” Saunders said. “They don’t come back.”
    Shale drilling and the money it generates means parents will be able to put their kids through college. It means the next generation will be able to find jobs and build lives here, instead of moving 100 miles away.
    “This is something significant,” Saunders said. “It really, really is.”
    Reach Shane Hoover at 330-580-8338 or shane.hoover@cantonrep.com
    On Twitter: @shooverREP