In a new push for development of the Marcellus and Utica shales, Ohio Gov. John Kasich has appointed former Ohio Department of Natural Resources (ODNR) Director David Mustine to a top post with JobsOhio, Kasich's new private, nonprofit corporation designed to spur job creation and economic development.
Meanwhile, a state senator has introduced two bills in the Ohio General Assembly, one of which calls for a moratorium on hydraulic fracturing (fracking) in the state until the U.S. Environmental Protection Agency (EPA) completes its study on the practice.
Mustine -- a former senior vice president at Columbus, OH-based American Electric Power and director of an oil and gas service business based in Dubai, United Arab Emirates -- will serve as energy division manager for JobsOhio, which the Ohio General Assembly authorized when it passed HB 1 in February.
Kasich spokesman Rob Nichols told NGI's Shale Daily on Monday that JobsOhio, which is led by a nine-member panel of business and education executives, is funded through profits from the state sale of liquor, estimated to be about $100 million annually.
"The revenue will go to fuel economic development," Nichols said. "It is significant."
Kasich is a strong proponent of shale gas development in the Buckeye State, even going so far as to call it a "godsend" after winning last year's gubernatorial campaign (see Shale Daily, Jan. 4). He tapped Mustine, who is also an ordained minister, to head the ODNR in January.
"I'm very optimistic that this is going to work," Kasich told WHIZ-TV during a visit to Zane State College in Zanesville, OH, on Sept. 7. He added that shale gas development "is something that should go on for a while. This is not a one-year deal."
Kasich, members of his cabinet and JobsOhio officials were at Zane State to discuss shale gas development strategies. The school has a program to prepare students for energy careers.
"We have the only natural gas engineering technology program approved by the Ohio Board of Regents in the state," Zane State College President Paul Brown told WHIZ, adding that interest in the program has risen sharply. "Our vision is to create a high-tech corridor here in Appalachia and turn it into a real economic asset to the state."
Kasich lauded the school's program, saying "you want to make sure you answer the needs of these [oil and gas] companies and make it clear to them that we expect an Ohio preference for people that need to work."
The governor added that economic development and jobs would be created once shale gas takes off in Ohio. "The people that are here who are working in this industry, they will be down at the ice cream bowl and they will be at the barbershop and staying in our hotels, so it could be very good for us," Kasich said.
The governor is scheduled to give the closing remarks at a two-day energy and economic development summit at Ohio State University Sept. 21-22, which will feature a segment on the Utica and Marcellus shales. The Kasich administration will reportedly use input from "The Ohio Governor's 21st Century Energy & Economic Summit" to shape policies on jobs and energy issues.
Despite Kasich's optimism, some legislators are still opposed to fracking. Sen. Michael Skindell (D-Lakewood) introduced SB 212 and SB 213 on Sept. 6. The first bill calls for operators to disclose the chemical contents of fracking fluids, to pay a 5% overriding royalty fee for each fractured well and disclose how they will dispose of produced water.
"The people of Ohio should be protected by proper regulations of the oil and gas industry," Skindell said. "Water is our most precious natural resource, and SB 212 will create safeguards for drinking water throughout our state. Ohioans should not fear the quality or safety of the water that comes into their homes."
SB 213 would prohibit fracking in the state until the EPA publishes its report on the practice, and the head of the state Division of Oil and Gas Resources Management in turn delivers a report to the General Assembly over how state law would address any concerns the EPA has over fracking (see Shale Daily, Feb. 22).
Kasich tapped ODNR Assistant Director Scott Zody to serve as the agency's interim director on Sept. 7.
Last week Hess Corp. acquired a stake in almost 185,000 net acres in the Ohio portion of the Utica Shale after purchasing Marquette Exploration LLC for $750 million and agreeing to partner with CONSOL Energy Inc. on half of its nearly 200,000 acres for $593 million (see Shale Daily, Sept. 9; Sept. 8).