Obituaries   |   Area Deaths   |   Crime Watch   |   Celebrations   |   Real Estate Transfers   |   Permits

New study says Utica shale will produce 143,000 Ohio jobs, add $18 billion to state’s economy by 2020

By Bob Downing
Beacon Journal staff writer

Print
Reprint
Subscribe
Add This

Utica shale development will support 143,000 jobs in Ohio by 2020 and 266,000 by 2035 — dramatic increases from the 38,380 jobs today.

That analysis came Wednesday from IHS Inc., a leading global energy research group.

Study co-sponsors included the U.S. Chamber of Commerce’s Institute for 21st Century Energy, the American Petroleum Institute, the American Chemistry Council, America’s Natural Gas Alliance and the Natural Gas Supply Association.

The report also showed that Ohio drilling in 2012 added $4.1 billion to the state’s economy. That total is projected to reach $18 billion by 2020.

Drilling produced $911 million in 2012 in state and local tax revenue in Ohio, a total that could climb to $4.6 billion by 2020.

“Shale energy is a game-changer for America, and for Ohio,” said Karen Harbert, president and CEO of the energy institute.

“The latest installment of this study allows us to quantify just how significant the impact on Ohio’s economy will be,” she said in a news release. “It provides all the more reason to strongly support responsible shale energy development.”

Linda Woggon, executive vice president of the Ohio Chamber of Commerce and executive director of the Ohio Shale Coalition, said: “Ohio is already seeing a significant boost to our economy from shale energy, and this study shows that much more is to come.”

The state has issued permits for 477 wells in the still-developing Utica shale region in eastern Ohio. To date, 196 wells have been completed, with 45 in production.

The industry expects to have more than 2,000 Utica wells in Ohio by 2015. Pipelines and processing facilities must be built before Ohio’s wells become fully developed.

The new report is the second of three parts looking at the economic impact of shale drilling in states. The first report, looking at national benefits, was released in October.

The final report, expected in early 2013, will look at moving and processing natural gas, oil and natural gas liquids, and the use of those materials by chemical companies and manufacturers.

Nationally, the IHS study shows that shale drilling is supporting 1.2 million jobs with projections of 2.5 million jobs by 2015, 3 million by 2020 and 3.5 million by 2035.

In 2012, shale energy produced $62 billion in government revenue via taxes.

Between now and 2035, shale energy will contribute an estimated $2.5 trillion in total government revenue — with half going to the federal government.

Ohio is ranked among the top 10 shale-producing states based on number of workers.

The 38,830 workers rank Ohio as No. 9, behind Texas, North Dakota, California, Colorado, Oklahoma, Pennsylvania, Utah and Louisiana. Arkansas rounds out the top 10.

The IHS analysis reveals that while the economic contributions are driven largely by activity in the 16 states with natural gas/oil production, a significant portion is located in the 32 non-producing states in the continental U.S.

The top 10 non-producing states in terms of jobs are New York, Illinois, Michigan, Florida, New Jersey, Minnesota, North Carolina, Georgia, Missouri and Wisconsin.

“The [shale] revolution is having a bigger impact across the country, including in non-producing states, than is generally recognized,” said Daniel Yergin, vice chairman of IHS. “What we found is that the economic and financial links reach out across all the states in our highly interconnected national economy.”

John Larson, vice president of IHS public consulting, said shale development holds potential to produce an “even broader impact on the U.S. economy.”

“By lowering the cost of key industrial inputs — such as natural gas — this [shale] revolution could help lay the foundation for a renaissance in U.S. manufacturing and increased competitiveness in the global economy,” he said.

The new report offers a more precise estimate of the financial effects of shale drilling than previous reports, said Christopher Guith, vice president for policy at the U.S. Chamber of Commerce.

Shale gas has been a quiet and overlooked development in parts of Ohio and parts of the United States, he said.

Utica shale remains a work in progress in Ohio, but it is a “very, very promising” development, he said. “What’s happening is a good story. And it’s just beginning.”

The report is online at www.uschamber.com.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com