n the wake of a policy consortium's report critical of the boost in jobs from the shale boom in the tristate area, Ohio has come out with numbers telling a different story.
There were 8,192 jobs in drilling and pipeline construction in Ohio in the first quarter of 2013, according to state data reported on by Columbus Business First. It's an increase from the first quarter of 2011's 6,263 and up 12 percent from the 7,329 in the first quarter of 2012.
These are just the core shale-related jobs in Ohio, not the jobs that are directly impacted.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
copious.abundance wrote:Hey, it's still early.
Was reading lots of stuff earlier in the year that the oil window in this shale was a looking bit disappointing, though the jury is still out. But there's no doubts about the wet and dry gas windows.
And it's not very exciting as of yet, but Ohio c&c production has finally started ticking up the past few months:
http://www.eia.doe.gov/dnav/pet/hist/Le ... RFPOH2&f=M
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
copious.abundance wrote:I was actually thinking of doing that, but of course at 21K bpd it would have been a joke.
Ohio reached a key milestone regarding Utica Shale development this week. Per the Ohio Department of Natural Resources (ODNR) Utica Shale permit page, the state has approved over 1,000 Utica Shale permits since 2010. The activity in Ohio is only growing as we continue to see new counties being explored and new companies seeking permits to develop the Utica.
Since 2010, companies have come to Ohio and invested an unprecedented amount of capital into eastern Ohio’s struggling economy. New natural gas processing facilities are being built and companies supplying Utica Shale operators are now making Ohio their home. In fact, a recent report from Columbus-based law firm Bricker and Eckler found over $12.2 billion has been invested in Ohio thanks to Utica Shale development.
This investment and rapid pace of permitting is making the Utica Shale in Ohio one of the fastest growing shale plays in America. During Hart Energy’s recent DUG East conference in Pittsburgh, Chris Simon, managing director of asset acquisitions and divestitures at Raymond James Financial Inc, remarked the Utica’s pace of development meets or surpasses the rate of exploration and production in some of the major shale plays across the country.
During these first three years of Utica Shale activity, companies have been able to determine the sweet spots for development. Currently, companies are focusing their efforts primarily in seven counties.
CarrollCounty- 352 Permits
HarrisonCounty- 154 Permits
ColumbianaCounty- 94 Permits
NobleCounty- 74 Permits
GuernseyCounty- 65 Permits
BelmontCounty- 59 Permits
MonroeCounty- 55 Permits
While the core of activity remains in these seven counties, new counties continue to be explored and tested. In the northern portion of the Utica, Mahoning and Trumbull Counties are both seeing encouraging results. In the southern portion of the Utica, Washington County has also seen some impressive results from test wells by PDC Energy. PDC was so encouraged by its Washington County wells that in November the company permitted a well in the adjacent Morgan County, the first Utica Shale permit for that county.
All of this activity has been a true blessing for Ohio’s economic outlook. In a recent report, the Ohio Department of Jobs and Family Services found that core-related shale jobs in the Utica Shale have grown by 30 percent from January 2011 to January 2013. These well-paying jobs are providing wages that are 68 percent higher than Ohio’s average wage of $44,367. This is a significant increase for those in eastern Ohio where our average wage is usually much lower than the state average.
Though the issuance of these 1,000+ permits, operators in Ohio have determined the sweet spots for development and placed significant amount of investment into our state. While there is still a good amount of research to done on the Utica, we are continuing to see very positive results. As we move into 2014, these investments and permits will only continue to grow, providing Ohioans with high paying jobs and economic activity that has long remained stagnant in eastern Ohio.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
copious.abundance wrote:Here is a more recent map showing the (known) extent of the Utica shale in Ohio. Looks like it covers about 1/3 of the state (give or take), with the oil and wet gas windows covering maybe 1/4 of the state. So that's about 10,000 square miles.
link
shallow sand wrote:From my reading Utica is primarily gas, like Marcellus. Looks like gas rates can be huge though.
shallow sand wrote:What are the cost ranges for Utica wells? The production amounts reported for oil would be good for conventional wells, but don't seem to strong on average compared to the three big US horizontal areas. Agree it is still early, but lower oil price and low natural gas price won't help. Also assume big decline so if they are below 100 bbl per day quickly, may not work until oil price spikes.
Subjectivist wrote:I wonder how WTI prices will effect the economy here? Some folks laughed when I said Utica is very important to the Ohio economy, but I for one do not find any humor in the current volatility in the oil market. Ohio needs these jobs.
Ohio misses on severance tax
The responsible use of Ohio’s natural resources is crucial to the well-being of its residents and to the long-term sustainability of its economic infrastructure. Currently, Ohio is 13th among states in terms of crude oil production and 6th in terms of natural gas.
The Marcellus and Utica shale formations, which lie, in part, under the hills of eastern Ohio, are two of the most important sources of natural gas in the United States. Since the rise of hydraulic fracturing (also known as “fracking”) in 2010, more than $40 billion worth of natural gas has been extracted from Ohio’s shale deposits.
However, the astounding wealth that has been created from state resources and using state infrastructure has overwhelmingly benefited a small number of rather large pockets. The expansion of oil and gas production locks in future greenhouse gas emissions in a time when the need to mitigate our contributions to climate change is more desperate than ever.
If Ohio policymakers refuse to embrace safer energy technologies, then they should at least ensure that oil and gas extraction increases the shared prosperity of the people of Ohio rather than fueling short-term private gains.
It is time for Ohio’s oil and gas drilling corporations to pay their fair share. Ohio still has significant untapped reserves of hydrocarbons and their extraction should be subject to a severance tax at the level of other major gas- and oil-producing states.
A fair state-level severance tax would help ensure that the exploitation of Ohio’s hydrocarbons funds critical state services responding to the pressing needs of all Ohioans and the prospects of their children. Furthermore, a severance tax permanent fund — sometimes called a legacy fund — like those of other gas-producing states and tribal nations, would go a long way toward a thriving Ohio beyond the ups and downs of the fracking boom.
A permanent fund produces a sustainable investment endowment that generates revenue from interest earnings that can be used to finance the needs of a region or state.
Over the years there have been several attempts to legislate a fair severance tax in Ohio. In 2015, Republican Gov. John Kasich proposed a 6.5% severance tax on gas and oil production and a 4.5% tax on natural gas liquids.
Years earlier, Policy Matters Ohio proposed a flat 5% severance tax on gas and oil and, after certain trigger points, a 2.5% fee toward a legacy fund that could provide long-term benefits despite the volatility of oil and gas markets. However, after an aggressive lobbying campaign from the Ohio Oil and Gas Association and the American Petroleum Institute, lawmakers refused to act.
Ohio drilling operators pay a dime per barrel of crude oil and half a nickel per thousand cubic feet of natural gas. This is one of the lowest severance taxes in the country and it means that years of gas and oil production have enriched corporations and drillers but not the communities that host them nor the state that supports them.
The promises made by oil and gas corporations never materialized and the Appalachian counties that were supposed to thrive have grown poorer. According to a recent Ohio River Valley Institute report, in the period between 2008 and 2019, gas-producing counties (Belmont, Carroll, Guernsey, Harrison, Jefferson, Monroe and Noble) had a net job loss of 8%, growth in personal incomes lagged state and national averages, and the local population decreased by over 5%.
These statistics only scratch the surface of the negative local impacts that have ravaged eastern Ohio in the past decade. All this while the same counties grew, in terms of GDP, five times faster than the state of Ohio and four times faster than the nation as whole. In other words, Ohio’s gas producing counties are being drained of both their natural resources and their economic vitality at the same time.
What would have happened if the General Assembly had instituted one of the several severance tax proposals since 2010 — say, the one proposed by Policy Matters? Based on Ohio Department of Natural Resources data, a flat 5% severance tax on crude oil and natural gas going back to 2016 would have produced more than $1.5 billion in revenue, $1.244 billion more than under current severance taxes.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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