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Ohio Utica Shale

Ohio Oil & Gas Association takes issue with study

By Bob Downing Published: May 17, 2012

The Ohio & Oil Gas Association is taking issue with a new study on Ohio's proposed drilling taxes by Ernst & Young that was done for the Ohio Business Roundtable.

Here is the statement of Tom Stewart,  executive vice president of the Ohio Oil and Gas Association:

"The Ohio Business Roundtable’s analysis of Gov. Kasich’s proposal to increase the severance tax on oil and natural gas producers throughout the state is based on several flawed assumptions.

"The study, conducted by Ernst & Young, drastically underestimates the up-front cost of developing a horizontal well. The cost of an average horizontal well in Ohio is between $8 and $12 million, far more expensive than the report’s assumption of $4 million per well. The report also assumes that an average Ohio well will produce 90,000 barrels of natural-gas liquids in the initial year of operation. Based on actual production of horizontal wells in Ohio to date, it could take years for the average well to produce that amount.

"The Roundtable’s analysis also fails to take into account the tax abatements offered in many states and the approximately 6 percent personal-income tax rate paid by Ohio’s landowners and oil and gas producers.

"We’re also very curious as to why the CEOs and business leaders that comprise Ohio’s Business Roundtable would support a tax increase on another business, particularly when they pay a commercial activity tax (CAT) rate of just 26 cents per $100 in revenue, while asking one industry to pay a rate nearly 16 times higher."

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

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Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

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Buckeye Forest Council.

Earthjustice, a national eco-group.

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People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

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Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.