Shale O&G has Invested Nearly $100 Billion in Ohio Since 2011

MARCELLUS DRILLING. JobsOhio, a private nonprofit largely funded by liquor sales that the state allows the nonprofit to collect (in essence, it collects sales tax on liquor sales), pays Cleveland State University to research and issue a report every six months on Utica Shale investment. The latest semi-annual report (full copy below) covers shale investment in the Ohio Utica from July 2021 through December 2021. Here’s an astonishing statistic: With this latest report, total Utica Shale investment in the state of Ohio since 2011 is nearly $100 billion!

However, along with the good news is some disappointing news. The study found that during 2H21, overall upstream (i.e. drilling) investments were down compared to the year’s first half.

Midstream (i.e. pipeline) investment began to recover from a COVID-related downturn. Downstream (i.e. natgas power plants and chemical plants) investments saw major equipment installations.

Of the $97.8 billion cumulative investment in 2H21, $68.1 billion was in upstream, $21.4 billion was in midstream, and $8.3 billion was in downstream industries.

JobsOhio issued the following press release announcing the latest edition of their semi-annual report:

Total investment in Ohio’s resource-rich shale energy sector was approximately $2.5 billion in the second half of 2021, according to a Cleveland State University (CSU) study. Prepared for JobsOhio, the latest report covers shale investment from July 2021 through December 2021. With the latest report, it brings the total sector investment to nearly $100 billion in the state of Ohio since 2011.

The study found that during the second half of 2021, overall upstream investments were down compared to the year’s first half; midstream investment began to recover from a COVID-related downturn, and downstream investments saw major equipment installations. Of the $97.8 billion cumulative investment, $68.1 billion has been in upstream, $21.4 billion in midstream, and $8.3 billion in downstream industries.

“The cumulative investment in shale gas development over time has brought thousands of jobs to hard-working Ohioans and affordable energy to residential and industrial consumers,” said J.P. Nauseef, JobsOhio president and CEO. “Ohio has the resources, the regulatory environment, the talent, and the central location to continue to evolve as an international player in shale-related productivity.”

“Investment, especially in drilling, continues unabated, notwithstanding supply chain and other difficulties in the second half of 2021,” said Andrew R. Thomas, Director of the Energy Policy Center in the Maxine Goodman Levin College of Urban Affairs of CSU. “This ongoing investment is critical to affordable and reliable domestic energy and manufacturing, which is more important now than ever given the current geopolitical issues in Europe and Asia.”

Upstream Investment

Overall upstream investments were down by about $78 million in the second half of 2021, reflecting continued improving cost efficiencies for drilling. 86 new wells were drilled during the third and fourth quarters of 2021, up by 12 from first and second quarters of the year, and the total volume of gas-equivalent shale production in the second half of 2021 was 2 percent greater than overall production in the first half of 2021. Jefferson County had the highest number of new wells with 23, followed by Belmont, Carroll and Columbiana Counties.

Midstream Investment

The $74.3 million spent on gathering lines and compression in the second half of 2021 represented a 73 percent increase in gathering system buildout compared to the year’s first half and helped spur a recovery in midstream investment following a pandemic-related downturn. An additional $243 million in midstream investment was actively underway as of November 2022.

Downstream Investment

During the second half of 2021, downstream investment saw major equipment installation for the combined heat and power (CHP) plant at Ohio State University’s main campus. The 105.5 MW facility represents a $289.9 million investment. Natural gas-based power generation is expected to receive $1.2 billion in future investments for the Trumbull Energy Center, for which financing was secured in late 2022.

This is the twelfth CSU study reporting investment resulting from oil and gas development in Ohio related to the Utica and Point Pleasant formations. The latest report and previous reports can be found here. For more information on Ohio’s growing energy industry, visit WWW.JOBSOHIO.COM/ENERGY.

About JobsOhio

JobsOhio is a private nonprofit economic development corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion. The organization also works to seed talent production in its targeted industries and to attract talent to Ohio though Find Your Ohio. JobsOhio works with six regional partners across Ohio: Dayton Development Coalition, Ohio Southeast, One Columbus, REDI Cincinnati, Regional Growth Partnership, and Team NEO. Learn more at WWW.JOBSOHIO.COM. (1)

The Ohio Oil Gas Energy Education Program (OOGEEP) had this take on the report:

Today JobsOhio and Cleveland State University released their report on shale-related investment in the state of Ohio. This report shows that the natural gas and oil industry has saturated Ohio with nearly $100 billion dollars of investment, with an investment of $2.5 billion dollars between July and December of 2021.

“Our natural gas and oil energy industry is something Ohioans can be proud of. This report shows not only all the work the men and women of this industry are doing, but the immense benefits that are brought to communities across Ohio,” said George Brown, Executive Director of Ohio Oil Gas Energy Education Program.

This is the 12th JobsOhio/CSU study on the natural gas and oil industry’s investments related to the Utica Shale formation. This report looks at upstream, midstream and downstream investment made by the energy industry. Since 2011, the study estimates a total of $97.8 billion has been invested in the state of Ohio.

Other highlights in the report:

– $1.2 billion in royalty payments made to Ohioans, about 14% higher than in the first half of 2021

– 86 new wells listed by the Ohio Department of Natural Resources, a 16.2% increase from the beginning of 2021

– Ascent Resources and EAP Ohio were the top producers during the time period in Ohio

– “The cumulative investment in shale gas development over time has brought thousands of jobs to hard-working Ohioans and affordable energy to residential and industrial consumers,” said J.P. Nauseef, JobsOhio president and CEO. “Ohio has the resources, the regulatory environment, the talent, and the central location to continue to evolve as an international player in shale-related productivity.”

During the current energy crisis it’s important to celebrate the immense potential that lies in Ohio. The Utica Shale is an incredible economic tool for the state but furthermore provides our nation with reliable, affordable and essential energy. (2)

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