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Lure of oil and gas to attract new businesses

April 2, 2012
By Evan Bevins - The Marietta Times (ebevins@mariettatimes.com) , The Marietta Times

The promise of increased employment is a big part of the allure of Utica shale exploration, and those new jobs wouldn't just be drilling wells and working rigs.

"This is going to affect anybody down there that's in the aggregate business, the landscaping business, obviously the restaurant and hotel business," said Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program.

Area hotels have already seen a spike as a result of people coming to the area to research titles and do other work related to tapping the resources in the underground shale formation, and some local real estate companies are seeing increased interest in rental properties.

Pioneer Pipe has added about 40 positions recently as a result of fabricating more pipe for the oil and gas industry. Two years ago, that accounted for about 5 percent of the company's business; now it's closer to 20 percent, according to an analysis of the economic impact of shale development prepared by faculty from Marietta College, The Ohio State University and Cleveland State University.

And besides oil and natural gas, other compounds extracted through the hydraulic fracturing, or fracking, process - such as ethane and other natural gas liquids - could be a benefit to polymer companies, a number of which are located in Washington County.

Wally Kandel, senior vice president of Solvay Group and manager of the company's plant on Ohio 7, said those materials wouldn't be of use to Solvay's process, but shale development is still a positive thing from their perspective.

Fact Box

Q&A: Former state rep opens Marietta law office to help landowners navigate 'boom'

One of the first Washington County business to come about directly because of shale exploration is former state Rep. Jennifer Garrison's new legal practice, the Southeastern Ohio Landowners Association.

Garrison worked as an attorney in Marietta before election to the House of Representatives in 2004. She opened the practice at 250 Front St., Marietta, last year. She deals exclusively with negotiating mineral rights leases for landowners' associations.

Q: What led you to decide to open this practice?

A: I believe that landowners do better by collectively negotiating their mineral rights. And we've done extremely well. We've completed three closings. ... We just completed closing 9,000 acres in Monroe County. It'll be a $40 million deal when it's done.

Q: Is your experience in the legislature part of what caused you to focus on this area of law?

A: Yes. I knew that the area is rich in oil and gas, and I was aware of the Marcellus and Utica shale play in Ohio. And it was at a time when I was looking for a new area to represent people. And that's what we do here. I'm very, very proud of the leases we've negotiated. They provide for no water usage by the oil and gas company, no compressor stations, no injection or disposal wells. ... It also has favorable tax and insurance provisions for the landowner.

Q: This is all your practice handles. Have you made any plans or looked ahead to what you may do once the leasing frenzy dies down?

A: Actually, I have not. I've mainly just been working 60 hours a week because it's very intense right now and it requires that. ... I feel like I'm helping the people I used to represent.

Evan Bevins conducted this interview.

"Certainly the additional natural gas and improved natural gas pricing in the area would be a benefit for us," he said.

But it's not just existing businesses that are feeling the effects. New ventures have already sprung up or been announced, from a Marietta law practice to a Noble County plant that could employ as many as 100 people.

Former state Rep. Jennifer Garrison opened a law office on Front Street under the name Southeastern Ohio Landowners Association to assist groups of landowners with oil and gas leases.

Meanwhile, Denver-based energy company MarkWest announced it was building three new facilities in the region - two in Harrison County and one in Noble County.

"They want to bring it close to the resource base," Reda said. "What you don't want to do is get into huge transmission costs."

The experience of counties to the north, where the shale boom has been underway for longer, can help paint a picture of what the area could see if shale exploration continues to progress.

Chesapeake Energy announced a $900 million investment to build a natural gas-processing plant in Columbiana County, which by itself will give Ohio more processing power than all but 15 states, said Dale Hileman, executive director of the Eastern Ohio Development Authority. The company also plans to locate its state headquarters or other facilities in Belmont County, he said.

Meanwhile, Halliburton is putting a facility in Muskingum County due to its work on fracking activity in the region.

In Carroll County, a lease agreement for the land at the shuttered Atwood Lake Lodge is bringing in about $2.5 million, Hileman said. That will allow the Carroll County Commission, which recently took over the facility from the Muskingum Watershed Conservancy District, to reopen it, possibly as soon as May.

Atwood has about 105 rooms, and Hileman said officials expect they could nearly fill the space with people involved in the shale activity.

"They would hope to actually make provisions for some tourism," he said.

The shale economic impact study notes shale development could help accelerate the transition to gas-fired electrical generation, which could be cause for optimism about the future of the fifth generator at American Electric Power's Muskingum River plant.

Federal air-pollution regulations have AEP planning to retire four of the plant's five generators by the end of 2014. The fate of the fifth generator is not known, although there has been some discussion of converting it to a natural gas unit.

Recent developments

Denver-based MarkWest announced a planned $500 million investment, resulting in the construction of natural gas processing plants in Harrison and Noble County and a fractionation facility in Harrison. The plants are expected to employ 50 to 100 people.

NiSource Gas Transmission and Storage's Midstream Services announced plans to construct an approximately 90-mile-long, large-diameter gathering system for wet and dry natural gas. It will utilize Columbia Gas Transmission's existing right of way extending through Columbiana, Carroll, Jefferson, Harrison, Belmont, and Monroe counties.

Chesapeake Energy plans a $900 million investment in Columbiana County to build a natural gas processing plant.

Halliburton is locating a facility in Muskingum County to support fracking operations.

 
 

 

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