Counties Enjoying Shale Boom

WOODSFIELD – Rents in Monroe County have rocketed to $1,500 to $2,000 a month. Visitors to Carroll County can probably get a motel room three years from now.

New car and truck sales in those two counties, plus Belmont, Jefferson and Harrison counties, rose 19.8 percent in 2011 from 2010, outpacing the 12.6 percent gain statewide. Jobless rates are improving faster than many other counties around the state.

The thread tying the local counties together is the natural gas drilling industry. Despite some skepticism and worries, the economic impact from leases worth millions of dollars to landowners and spending by experienced drilling workers coming from outside the area already is beefing up business and county coffers, along with providing jobs in areas that have been experiencing high unemployment.

“This is just in its infancy,” said Glenn Enslen, director of economic development for Carroll County. “I’m visited weekly by folks who talk about results similar to the boom in North Dakota. They have a half-percent unemployment rate there, and the population of (that) county has doubled in three years.”

Carroll County’s unemployment rate fell to 8.5 percent in November from 11.2 percent in November 2010 – and is on track to fall more. Enslen said Texas-based Select Energy Services is gearing up to hire 200 workers to repair drilling equipment, haul water and provide other services to drillers.

The result is a boom for motels, restaurants and other businesses.

“Our motels are full. You can probably get a reservation in three years,” Enslen said, adding the jobs are expected to be long-term.

Other counties have done even better. Jefferson County’s jobless rate fell from 12.7 percent percent to 9.3 percent in the same period.

The local counties outperformed other Ohio counties with traditionally strong economies. Cuyahoga County posted a 19.8 percent drop in the number of unemployed, with a rate of 7.3 percent, while Franklin County’s number of unemployed improved 15.2 percent to a rate of 6.7 percent.

Experienced workers from Texas, Oklahoma and other energy-rich states make up a significant number of the new residents. The rush is creating a shortage of motel rooms, apartments, even campsites, as well as driving up rents.

Sam Moore, owner of Swiss Lands Realty LLC in Woodsfield, said places that have rented for $300 to $350 a month are going for $1,500 to $2,000.

Land and home sales haven’t dramatically increased, however, because owners can make more money through gas leases on land or by renting their house, Moore said.

The exception has been cases where people buy a house with the intention of renting it to gas workers.

Richard Kiko Jr., chief executive officer of Kiko Auctioneers & Realtors in Carroll County, expects homebuyers to emerge as the shale rush matures.

“The first wave is a lot of out-of-state workers who live out of hotels and rentals. The second phase will be people hired for long-term jobs, a lot of engineering and monitoring,” he said.

With predictions of 100 wells being drilled a year, Kiko sees mid-priced houses in the $50,000 to $150,000 range as being in the most demand as workers advance from motels to rentals, then to permanent housing.

He said he’s not concerned about overly rosy drilling projections, largely due to a housing shortage.

“We’re lucky in northeast Ohio because we have a reduction in supply because of no construction in recent years, then you add this demand, and we’ll have a double effect,” he said. “Even if they drill 50 wells a year, that’s more jobs.”

More jobs means more spending on vehicles and other items that generate sales tax revenue for counties.

Harrison County and Carroll County saw their sales tax receipts increase at 8.7 percent and 8.6 percent, respectively, which surpassed the statewide increase of 8.4 percent when comparing October 2011 to October 2010.

Monroe County did even better, posting a 12.2 percent boost in sales tax receipts.

“We’ve seen years where we had a carryover from year to year of less than $20,000. We’d have to go to the bank and borrow to make payroll at the end of the year. This year, we have over a $300,000 carryover,” Monroe County Auditor Pandora Neuhart said.

New and used vehicle sales fueled much of the sale tax gains. New vehicle registrations in title offices of the five counties hit 3,808 in 2011 from 3,179 in 2010, a 19.8 percent increase.

New vehicle sales in Monroe County surged 37 percent for the period to 259, while Carroll County saw a 30.3 percent gain to 580.

Stronger sales will prompt Mike Knowlton to add a mechanic at his Knowlton Ford Mercury in Woodsfield.

“People in the county are starting to get money from land leases. People are buying trucks and things they normally wouldn’t have bought,” he said. “There’s more optimism. We feel we’re on the front end of this. We think it’ll get better.”