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Ohio Utica Shale

Summit County getting economic benefits of drilling, study says

By Bob Downing Published: January 10, 2014

Summit County is starting to feel the economic benefits of Utica shale development, according to a new report by Cleveland State University.

Akron, Canton, Youngstown and suburban Columbus are increasingly attracting service industry jobs and workers tied to drilling, said the 38-page compiled by Edward W. (Ned) Hill, Kelly L. Kinahan and Allan R. Immonen III of the Maxine Goodman Levin College of Urban Affairs.

"Robust increases in sales" in those urban areas are due to their locations close to the main drilling areas, plus the facts that they have larger populations and stronger retail presences than more-rural counties where drilling is strongest, the report said.

Five moderate shale counties -- Stark, Portage, Mahoning, Trumbull and Tuscarawas -- plus Summit County saw "solid growth" with estimated sales increasing by 10.7 percent in the second quarter of 2013, based on Ohio Department of Taxation figures, said the Ohio Utica Shale Gas Monitor report.

"The spending is real," Hill said in an telephone interview.

It is the first report to specifically cite Summit County as a shale beneficiary.

Those counties show only a small employment increase: 0.5 percent in the first three months of 2013 and 0.4 percent in the second quarter 2013, the report said.

It said there has been "marked increases" in sales receipts in 2012 and the first half of 20134 in the eight major Utica shale counties: Carroll, Columbiana, Jefferson, Harrison, Guernsey, Belmont, Noble and Monroe counties.

Second-quarter sales receipts in those counties increased by 12.2 percent ($1.3 billion) in second quarter 2013 over second quarter 2012 ($1.16 billion), the report said.

Sales in the so-called strong and moderate shale counties "continued to outperform" sales in the rest of Ohio and that continued a trend that started in 2009, the report said.

The increased sales reflect spending by landowners with leasing bonuses — called "shaleionaires" in the report — and out-of-state workers paying hotel and restaurant bills.

In fact, employment appears to be growing more in outlying areas than in the eight counties in eastern Ohio that are the heart of the Utica shale drilling, the report said.

Employment in those counties remains "relatively flat" through the second quarter 2013, the report said.

Those numbers also reflect where a person lives rather than where they work, the authors noted.

Other key points from the report:

•What happens in Ohio in the future will likely be determined by the prices paid for natural has and natural gas liquids, the report said.

Low natural gas prices have resulted in Ohio drillers switching from natural gas to liquids to make more money, it said.

•Ohio will reap significant economic benefits if an ethane cracker plant is built in or close to Ohio.

There have been proposals to build such multi-billion-dollar plants that turn ethane, a liquid, into ethylene, a key component of plastic, in Beaver County, Pa., and Wood Co., W. Va.

There are also competing plans to ship that ethane by pipeline from Ohio to the Gulf Coast for processing, and that would hurt Ohio’s economy in the long run, the report said.

•Stark and Portage counties have been dubbed "moderate" shale areas along with Trumbull, Mahoning and Tuscarawas counties.

More exploratory work in those counties is needed to determine if those counties can produce significant volumes of natural gas liquids (ethane, butane and propane) to be attractive to driller, the report said.

Hill said that determination plus three others will help determine the success of Ohio’s Utica shale.

That includes continuing oil development near Cambridge, tapping natural gas liquids in the southern counties and the future development of the Marcellus shale in eastern Ohio, if natural gas prices rise significantly, he said.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.

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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.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

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.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

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.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

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

Allegheny Front, environmental public radio for Western Pennsylvania.