COLUMBUS: Responsible development of all of the United States’ domestic energy resources should be our national energy policy. More domestic energy supplies will increase our nation’s security, strengthen the competitiveness of U.S. companies, and decrease our reliance on oil and gas from unstable regions of the world.
With the onset of the Utica shale play in Ohio, it seems hardly a day goes by without hearing about our state’s energy industry potential. But Ohioans should also think “nationally” because the promise of U.S. energy independence can only be realized if our country realizes all the energy potential we have. For example, look thousands of miles away, to our nation’s Arctic region.
Beneath the surface, Alaska and Ohio share something in common. Enormous reserves of untapped energy lie beneath each state. As Ohio has vast opportunities with horizontal fracturing to release natural gas and oil from Utica shale formations, Alaska has huge potential for oil and gas in its outer continental shelf. Both reserves are essential because it is estimated that by the year 2035, oil and natural gas will still meet 55 percent of our nation’s energy needs.
In Alaska’s outer continental shelf, it is estimated that roughly 27 billion barrels of oil and more than 132 trillion cubic feet of gas are beneath the surface. This translates to 700,000 barrels of oil per day for 40 years, or the equivalent amount of oil we currently import from Iraq and Kuwait combined.
The Utica shale activity is well under way in Ohio. Experts say this year will see about 150 wells to 200 wells being drilled, and next year around 500 wells to 600 wells. In about three years, Ohio could see 1,000 wells each year being drilled for possibly the next 20 years or even longer.
In Alaska, while oil exploration in the outer continental shelf has been “shovel ready” since 2007, the process to get to actual exploration has been stalled. Shell Oil is the region’s largest leaseholder, with more than $2.2 billion invested in leases and more than $4.5 billion spent to prepare for safe and environmentally sound exploration.
In recent years, Shell has been faced with extended and multiple permitting processes, lawsuits, and bureaucratic delays at every turn. The unfortunate situation with the Deepwater Horizon incident in the Gulf of Mexico in 2010 presented more setbacks for Shell but also spurred government and industry to develop more solutions to mitigate such accidents and improve the technologies and standards that increase safety for all drilling in offshore regions.
This summer, Shell finally had progress as two drilling vessels moved into place in the Chukchi and Beaufort seas. As of this writing, the company will conduct “top hole” drilling only, and will not reach hydrocarbon zones this year. The progress made during this limited exploration phase will help with preparation for the 2013 season.
Ohio’s own energy boom in shale has well positioned our manufacturers, and oil and gas industry suppliers, to support this Arctic exploration and drilling. Ohio already has history with Alaska energy production. Many of the compressors in the Trans-Alaska Pipeline System were built here in Ohio. Since 1977, the Alaska pipeline has supplied U.S. refineries. With the ongoing decline of Alaska oil production, the pipeline is at risk of eventually being shut down, but oil from Alaska’s outer continental shelf could extend the life of the pipeline, further building our domestic energy supply and national security.
According to a Northern Economics Study, oil production from Alaska’s outer continental shelf could mean 55,000 new jobs nationwide per year for 50 years. Ohio’s pipe, steel and compressor manufacturers could participate in this opportunity. Our colleges and universities, as well as research institutes, can all contribute, as they have with the shale activity, in providing innovative science that guides understanding of geologic conditions, ecosystems, sea life and physical oceanography in the Alaska Arctic.
There is a powerful connection between Ohio and Alaska. Oil from Alaska and natural gas and oil from Ohio provide the basic chemical building blocks for Ohio’s resurgent chemical industry. Ohio chemical companies convert these building blocks into thousands upon thousands of products that make our lives better. It is time our federal officials stop excessive and punitive regulation, unending litigation and permitting delays and commit to common sense energy policies that will move our nation forward.
Pounds is the president of the Ohio Chemistry Technology Council.