Apr 22, 2019   SOURCE: BusinessWire

Ohio’s Growing Shale Energy Industry Has Attracted Over $74 Billion in Investment Since 2011

Total investment in Ohio’s resource rich shale energy sector has reached $74 billion since tracking began in 2011, according to a Cleveland State University study.

Prepared for JobsOhio, the report represents the most recent data available and covers shale investment through the first half of 2018. It comes just weeks after IHS Markit released estimates that by 2040, the Utica and Marcellus shale region, of which Ohio is a significant part, will supply nearly half of all U.S. natural gas production.

The study from CSU’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs, showed that drilling activity slowed, but remained significant in Ohio from January to June 2018. During the first half of the year, investment in Ohio’s upstream, midstream, and downstream energy ecosystem totaled $4.6 billion, the study showed.

Upstream activities, such as drilling or royalties, accounted for more than $3.4 billion of this total. According to the Ohio Department of Natural Resources, 157 wells were listed as “drilled, drilling or producing” in Ohio, with Belmont, Monroe, and Jefferson counties representing the most active areas.

Total Estimated Upstream Utica Investment: January-June 2018

Lease Renewals and New Leases       $793,428,000
Drilling       $1,586,000,000
Roads       $9,420,000
Lease Operating Expenses       $191,148,000
Royalties       $787,390,000

Total Estimated Upstream Investment

     

$3,367,386,000

Investment continued in Ohio’s midstream assets, which include assets such as pipelines, processing plants, and storage, in the first six months of 2018. The investment included nearly $400 million worth of construction starts for processing plants, which represent the compression, dehydration and fractionation necessary in the processing of natural gas resources. However, the period saw more limited investment in transmission lines, largely due to the recognition of the Nexus pipeline investment being attributed completely to the second half of 2017.

Total Estimated Midstream Investment: January-June 2018

Gathering Lines       $5,790,000
Gathering System Compression and Dehydration       $229,600,000
Fractionation Plants       $168,000,000
NGL Storage       $1,000,000
Transmission Lines (including compression and interconnect)       $98,120,000
Rail Transloading Facilities       $3,000,000

Total Estimated Midstream Investment

     

$505,510,000

Progress was underway in the development of several downstream energy assets during the first half of 2018, including natural gas-fired electrical generation facilities, a Cleveland Cliffs hot briquetted iron plant, and a compressed natural gas fueling station in Columbus. However, the natural gas generation facilities were not included in the investment numbers; permitting was underway for several natural gas power plants at the start of 2018, but none had yet started construction.

Total Estimated Downstream Investment: January-June 2018

Manufacturing/Industrial Plants with Natural Gas as a Critical Feedstock       $700,000,000
Petrochemical Plants (Including Refineries)       $17,500,000
Natural Gas Refueling Stations       $1,000,000

Total Estimated Downstream Investment

     

$718,500,000

Indirect investments, such as development of new manufacturing in the area as a result of lower energy costs, were not included in the study.

“The landscape for American energy looks vastly different now than it did just 5 or 10 years ago, and that is largely due to the resources being unlocked in the Ohio Valley,” said Matt Cybulski, director of energy and chemicals at JobsOhio. “Whether you are directly involved in the oil & gas value chain, a petrochemical company, or an energy-intensive manufacturer looking for a new home, it is impossible to ignore what these abundant, low-cost feedstocks can do for your business.”

Much of this growth can be attributed to Ohio’s proximity to the Utica and Marcellus shale formations in eastern Ohio, offering a large supply of low-cost natural gas, natural gas liquids (NGLs) and oils, and accounting for more than 85 percent of U.S. shale gas production growth since 2011.

This study was the fifth in a series CSU has prepared on investment in the Utica Shale. A full history of the 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 corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts. JobsOhio works with six regional partners across Ohio: Appalachian Partnership for Economic Growth, Columbus 2020, Dayton Development Coalition, REDI Cincinnati, Regional Growth Partnership and Team NEO. Learn more at www.JobsOhio.com. Follow us on LinkedIn, Twitter and Facebook.