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Ohio Chamber Commissions Study on Shale Drilling

The Ohio Chamber of Commerce is partnering with three universities in the state to conduct an economic impact study on shale development.

Two public institutions, Ohio State University and Cleveland State University, will work with private Marietta College to research the effects of drilling in Ohio's portion of the Marcellus and Utica shale formations.

"We have all seen how natural gas development from the Marcellus Shale has created thousands of jobs and spurred growth in Pennsylvania. Ohio has the potential to be similarly successful," said chamber CEO Andrew Doehrel. "We need to understand better what that scope might be, and how we as a state can position ourselves to realize the most value from it."

The chamber said more than 25 organizations -- which include the oil and gas, steel, plastic, chemical, waste management, manufacturing and agricultural industries as well as water and heavy equipment providers, law firms and conservationists -- are funding the project. A final report is scheduled to be issued by the end of the year.

According to the chamber, the study will be conducted by Ohio State's Department of Agricultural, Environmental and Development Economics, Cleveland State's Center for Economic Development and Marietta's Department of Petroleum Engineering and Geology.

"This study is an important undertaking for evaluating what promises to be an extraordinary economic opportunity for the state of Ohio," said Ned Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State. "The impact to Ohio manufacturers alone could be significant, and we need to understand how it will impact our broader economy if we are to harness this great economic potential."

Representatives from the chamber and Ohio State will be among the speakers at an educational forum Thursday night on shale development. The event is being sponsored by two additional schools -- Central Ohio Technical College and the Ohio State University at Newark -- and will be held from 7 to 9 p.m. at the joint campus's John Gilbert Reese Center's Alford Performing Arts Hall.

The chamber played a key role in helping form the Ohio Shale Coalition in June (see Shale Daily, June 20).

Republican Gov. John Kasich signed Substitute HB 133 on June 30, the same day he also signed a two-year, $55.8 billion state budget. HB 133 opens state-owned land -- including state parks but excluding nature preserves -- to oil and gas leasing. Kasich supports shale development as a method of raising revenue for the financially strapped state (see Shale Daily, June 16; May 26; May 23; March 8).

Shale development in Ohio has heated up in recent months (see Shale Daily, Aug. 25; July 13). According to the Ohio Department of Natural Resources (ODNR), 43 permits have been issued for horizontal wells in the Utica and Point Pleasant shales since December 2009. Nine of the permitted wells have been drilled as of Monday. In the Marcellus permits have been issued for 13 horizontal wells, six of which have been drilled.

The department's most recent data shows that producers currently have horizontal drilling permits in 11 eastern Ohio counties. According to the breakdown, permits targeting the Marcellus have been issued in Belmont County, while permits targeting the Utica have been granted in Guernsey, Tuscarawas, Stark, Portage, Mahoning and Columbiana counties. Permits for both the Marcellus and Utica shales have been granted in Carroll, Harrison, Jefferson and Monroe counties.

ODNR reports reveal that Chesapeake Exploration LLC, a subsidiary of Chesapeake Energy Corp., is by far the most prolific operator in the Utica, but other operators -- some of whom are also permitted to drill vertical wells -- include Anadarko E&P Co. LP, EnerVest Operating, Ohio Buckeye Energy, CNX Gas Co., Marquette Exploration LLC, and HG Energy.

Meanwhile Chesapeake, Marquette, Protege Energy II LLC, Phillips Exploration Inc. and Triad Hunter LLC have all entered the Marcellus to drill both horizontal and vertical wells.

Last week Hess Corp. acquired a stake in almost 185,000 net acres in the Ohio portion of the Utica Shale after purchasing Marquette 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).

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