The staying power of the shale revolution
At times over the past few years it may have felt like Ohio’s shale revolution was over before it had even begun. The number of drilling rigs exploring for oil and natural gas has fallen by more than 70% over the last two years. Some energy companies even called it quits or faced bankruptcy. But make no mistake, the shale revolution has continued and it’s having an extremely positive impact on the state.
The number of rigs drilling for oil and gas in Ohio’s Utica shale is just a third of what it was in 2015, but overall production continues to grow. Monthly natural gas production has increased from just 0.1 billion cubic feet per day (Bcf/d) at the close of 2012, to more than 3.5 Bcf/d in June of this year.
Energy companies in Ohio have gotten very good at what they do. The amount of natural gas produced from each new Utica well is now six times what it was for a well drilled in 2012. Ohio’s shale industry has proven its staying power.
We have now entered a new phase in the shale revolution. It has already brought drilling jobs and pipeline and processing-plant construction jobs. It’s also creating jobs building new natural gas power plants and electricity transmission lines that will replace the state’s aging fleet of coal plants. In just the past five years, the Ohio Power Siting Board has approved 5,000 megawatts of new natural gas power capacity — enough capacity to power five million homes. These new power plants — many of them coming in southeast Ohio’s shale counties — represent billions of dollars in new investment and thousands of jobs that will be around for decades.
The U.S. Chamber of Commerce reminds us of not just what the shale revolution has helped us add, but also what it has helped us avoid. A new report from the Chamber, titled “What if America’s Energy Renaissance Never Actually Happened?”, found that without shale production and investment, the U.S. would have lost 4.3 million jobs and $548 billion in annual GDP. Ohio and Pennsylvania alone would have lost more than 230,000 jobs and nearly $23 billion in state GDP and $13 billion in labor income each year between 2010 and 2015.
Instead, fewer people are without work. Unemployment has been slashed. In some Ohio counties it has fallen by more than 60 percent. Investment in some economically-stressed counties has soared. Across West Virginia, Ohio and Pennsylvania’s shale regions, energy extraction is turning into reindustrialization. Construction of new petrochemical plants and natural gas power plants is picking up steam. More than 30 new natural gas power plants have been approved in the three states since 2010.
As the nation continues to lean more heavily on cleaner-burning natural gas to provide our electricity, the energy produced in Ohio will only grow in importance. The shale revolution might already seem old hat, but it’s still in its early innings. Jobs and investment are more than likely going to keep coming.
None of this would have been possible without energy-rich geology, but pro-development policies have been equally important, since there are those who fight energy development at every turn. They believe Ohio or Pennsylvania would have been better off without shale development. They have succeeded in stopping the oil and natural gas industry from drilling — and investing — in New York. If we are to continue to reap the rewards of this economic bounty, we must remain vigilant and let science, logic, and economics influence energy policy, not emotion and misplaced hope in sources that aren’t really practical for this region.
Robert W. Chase, P.E., Emeritus Professor, Marietta College, Department of Petroleum Engineering and Geology, 215 Fifth St., Marietta.