Drilling into Ohio’s Utica shale for natural gas will create more than 65,000 jobs, and related economic development would total $9.6 billion by 2014, according to a study released Tuesday.
An 81-page analysis was done for the Ohio Chamber of Commerce and the Ohio Shale Coalition by Cleveland State University, Ohio State University and Marietta College. The study was funded by the chamber and Ohio industries.
The shale boom is expected to produce sweeping economic change in Ohio by adding $4.9 billion to the state’s gross domestic product in 2014, a 1 percent increase, the study says.
By comparison, the Utica shale development produced $162 million in Ohio GDP in 2011.
The data compiled is “very conservative” and that was done intentionally, said Linda Woggon, executive director of the Ohio Shale Coalition and executive vice president of the Ohio Chamber of Commerce.
The goal was to produce realistic numbers and not falsely raise expectations, she said.
“That’s a heck of a lot of jobs, and that’s exciting news for Ohio,” Woggon said.
The job-creation numbers were “not a surprise and about what we had expected,” she said.
The number of jobs cited in the new study falls between estimates from previous studies.
Big changes are coming to Ohio, the new study concludes.
Ohio had 33 wells drilled in 2011, of which only four were placed in production. The others are waiting for pipelines and higher natural gas prices.
According to most estimates, more than 1,000 wells will be drilled by 2014. That will require a $6 billion investment on the part of energy companies like Oklahoma-based Chesapeake Energy Corp., the biggest player in Ohio shale.
In 2011, drilling and production created 2,275 jobs in Ohio, the report says. That number is projected to grow to 12,150 in 2012; 40,606 in 2013; and 65,680 jobs in 2014.
The biggest job boom will be in gas-oil service companies that provide contract services to energy giants — with that portion of the job total doubling between 2013 and 2014. The jobs typically will average nearly $53,000 in wages and will generate $3.3 billion in labor income in 2014, the report says.
News on Monday that Baker Hughes, a Texas-based well-services company, wants to build a $64 million facility with 700 high-paying jobs in Massillon is an example of that growth.
The company, which won state tax credits tied to the facility on 108.5 acres south of U.S. 30 in southeast Massillon, is still negotiating with state, county and local officials to complete the deal.
Baker Hughes does not drill wells but provides services from well equipment and maintenance to water and chemicals.
In addition, Ohio drilling will produce $433.5 million in additional state and local income tax revenue by 2014, the study team said.
The study projects only through 2014, but its authors expect “the industry to continue to be growing in Ohio” in subsequent years.
The job numbers in the study are “very encouraging,” said spokesman Dan Alfaro of Energy in Depth-Ohio, a statewide pro-drilling group.
“It’s especially promising that all of this occurred in the infancy of the play with expansive job creation to come following the leasing and exploration phase, which is expected to conclude in 2014,” he said in a statement.
Last September, an industry-backed study by Cleveland’s Kleinhenz & Associates said the Utica shale boom could produce 200,000 jobs in Ohio by 2015. That study also indicated that royalty payments to landowners for gas produced could increase to as much as $1.6 billion by 2015.
In December, an Ohio State University study said only 20,000 jobs would be created over the next four years.
Ohio has more than 64,000 active wells in 49 counties and ranks No. 4 in wells drilled behind Pennsylvania, Oklahoma and Texas.
The new report is posted at www.ohshalecoalition.com.
Bob Downing can be reached at 330-996-3745 or firstname.lastname@example.org.