Friday, February 5, 2016

The Oil and Gas Industry’s Silver Lining

With all the gloom and doom in the news about the oil and gas industry, why would anyone remain optimistic about the future of drilling and exploration in the Utica Shale?

stark-carroll-county-oil-gasBecause the oil and gas industry remains important to the State of Ohio and it citizens, for one. Rhonda Reda, executive director of the Ohio Oil and Gas Energy Program, said this an article in Ohio Gas & Oil magazine: “Ohio’s oil and gas industry has been producing crude oil and natural gas from various geological formations beneath our feet for more than 150 years. The past several years have also brought many new companies, jobs and innovations to Ohio’s industry, leading to unprecedented and record energy production levels. As a result, Ohioans are intertwined with the state’s oil and gas industry more than ever before.”

Beyond driving down gas prices at the pump—a fact that Americans are noticing across the country—shale gas development in recent years is poised to produce a boom in petrochemical and plastics manufacturing, according to an article by John Funk that appeared in the Nov. 21, 2015 edition of the Cleveland Plain Dealer.

Funk writing about a Cleveland State University study, reported that it examined “the extraordinary productivity of the wells developed so far, the capacity of the processing plants and pipelines, both those in service and those on the drawing boards, and the most likely rate of additional wells being drilled and gas production over the next five years.”

Much of the shale play under Ohio and West Virginia “produces not just methane but propane, butane and ethane, a trio of hydrocarbons called ‘natural gas liquids’ or NGLs,” he wrote.

Continuing, Funk reported that the study “projects that by 2020, the region—Ohio, Pennsylvania and West Virginia—will have such a surplus of ethane, which must be separated from methane before natural gas can be used as a fuel, that it will only make economic sense to build ethane refineries here rather than try to ship the volatile ethane to crackers on the Gulf Coast.”

As pointed out in the article, economist Iryna Lendel said that while most people tend to focus only on production, “they forget that we should be focusing on downstream development—on manufacturing, because manufacturing creates permanent jobs that require skills and pay well.”

As we shared in an article last November, those jobs are coming to Northeast Ohio—more than 2,000 during the construction of three natural gas-fired power plants in Carrollton, Lordstown and Yellow Creek Township, which is located in Columbiana County.

Tough times come along in any industry from time to time, but the ability to weather those storms and look for the silver lining in an otherwise cloudy forecast provides a vision for what the future truly has in store. And the future for Ohio, and the role the oil and gas industry will play in its economic resurgence, remains strong.

This article appeared in the February issue of ShaleMart magazine

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