X logo

Today's breaking news and more in your inbox.

I'm interested in (please check all that apply)

You may opt-out anytime by clicking "unsubscribe" from the newsletter or from your account.

Report: $50B Invested In Ohio Natural Gas Drilling

ST. CLAIRSVILLE –Companies spent more than $50 billion to extract and move natural gas from the Marcellus and Utica shale in Ohio from 2011 to 2016, according to a new study from Cleveland State and Youngstown State universities.

As contractors build multiple interstate pipelines through Ohio, while global energy demands keep climbing, industry leaders believe they are still in the early stages of the Buckeye State’s oil and natural gas boom.

According to oilfield services giant Baker Hughes, there are now 26 rigs running in Ohio, which is the highest number for June since 40 were running in 2014. Several of those 26 active rigs are in Belmont, Monroe, Harrison and Jefferson counties.

“It is not surprising to see the estimated investment made by companies operating here in eastern Ohio. While the cost of extracting minerals from the ground is not cheap, it is now worth their investment as they reap the rewards of a great market for the commodity,” Belmont County Commissioner Mark Thomas said.

“Land acquisition, rigs, workers, office space, fractionator plants — it all adds up,” Ohio Oil and Gas Association Executive Vice President Shawn Bennett said of the $50 billion invested. “And it would be a lot higher if we wouldn’t have had the downturn.”

New York Mercantile Exchange prices for natural gas tumbled from nearly $5 per Mcf in January 2014 to about $1.75 per Mcf by early 2016. On Friday, the price was slightly more than $3 per Mcf.

Even amid the downturn, Ohio Department of Natural Resources statistics show Buckeye State drillers and frackers pumped 1.37 trillion cubic feet of natural gas in 2016, a new record that shatters the previous year’s mark of 955.6 billion cubic feet.

“There is great enthusiasm here. Once we get some of these interstate pipelines going, it will be even more robust,” Bennett said. “There is still a lot to be developed. For every well that you drill, you have to drill another well to replenish the production. And you’re talking $8 million to $10 million per well.”

These interstate pipeline projects that will carry some of Ohio’s natural gas are in some stage of planning, permitting or construction:

∫ the $5.1 billion Atlantic Coast Pipeline,

∫ the $3 billion Atlantic Sunrise,

∫ the $1.4 billion Leach XPress,

∫ the $2 billion Nexus Pipeline,

∫ the $4.3 billion Rover Pipeline,

∫ the $3.5 billion Mountain Valley Pipeline, and

∫ the $2 billion Mountaineer XPress.

“Rover and Leach XPress continue to move forward. While we do want to consume as much of the gas in the basin as possible, 85 percent of the growth in natural gas production has come from this region. We need to get this gas to markets where it will be used,” Bennett said.

Bennett also said the $50 billion number may seem minuscule once the Royal Dutch Shell ethane cracker opens in Beaver County, Pa. — and it would really take off if Thailand-based PTT Global Chemical decides to build its proposed ethane cracker at Dilles Bottom.

In the industry, projects such as ethane crackers are often collectively referred to as “downstream” development, while drilling and fracking are considered “upstream.” Pipelines and processing plants are “midstream” infrastructure.

“I would hope that people looking to invest in the downstream look at how much is being produced in the upstream,” Bennett said of the large quantities of natural gas gushing from eastern Ohio. “Large scale industrial users can have low utility costs because of the natural gas, in addition to having the material (ethane) right here to process.”

“We as an industry are able to provide a resource that can translate into thousands of jobs up and down the Ohio River,” Bennett added.

Thomas, while acknowledging the activity that continues to increase in Belmont County, remains upbeat about the potential PTT project.

“I am very optimistic that the money spent in the region will continue to grow and that is good news for us, directly and indirectly, as the industry expands and new businesses sprout from it,” he said.


Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *


Starting at $4.62/week.

Subscribe Today