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Thursday, September 6, 2012

Romney or Obama: Who Gets a Boost From Ohio's Shale Boom?

From E&E Publishing:
There is no question of Ohio's revival.
The state's unemployment rate was 7.2 percent in July, more than a full point below the national average, creating rare bragging rights for a state that consistently exceeded the national jobless average from 2004 through the peak of the current downturn in 2010. Ohio's non-farm payrolls increased by 2 percent between July 2011 and this July, while jobs in manufacturing climbed a strong 3.3 percent, evidence of that Ohio was shaking its Rust Belt reputation.
The shale plays are making a dramatic difference in a few mostly rural counties east of Ohio's Interstate 77, which runs from Cleveland through Canton and Akron to the Ohio River.
Ohio's Carroll County, southeast of Canton, lies in the center of the Utica Shale play, a region of "wet" gas with both methane heating gas and valuable gas liquids. The state's Department of Natural Resources (DNR) reports that six operating shale wells in the county produced 31,513 barrels of oil in 2011. Output from three Utica gas wells totaled 900 million cubic feet last year, for a wellhead value for both gas and oil of more than $5 million in the equivalent of about three months' production.
Amy Rutledge, director of the Carroll County Chamber of Commerce, cites a 33 percent jump in the county's taxable sales in the first half of this year compared with the same period in 2011, from $94.9 million to $125.7 million. There now are nine active wells in the county and 28 more that have been completed but aren't producing yet, The Columbus Dispatch reported.
The county's pump has been primed by lease payments of $2,500 an acre and more by gas and oil developers, led by Chesapeake Energy Corp., which reports exploration rights on 1.3 million acres in Carroll and other eastern Ohio counties. Drillers have paid into county road funds, turning narrow gravel roads to well pads into paved highways required to carry water trucks that deliver millions of gallons of fracking fluids per well, Rutledge said.
It's the shale drilling, she said in an interview. "There isn't anything else happening here."
Even before companies began drilling in Ohio, the state's manufacturing sector had gotten a boost from the energy development through investments to expand steel pipe plants around Youngstown and Canton. The DNR estimates that $2.7 billion has been slated for construction of oil and gas production infrastructure in Ohio, from steel factories to gas processing plants and major pipeline expansion.
Environmental organizations continue to challenge the adequacy of Ohio's new safety rules and regulations governing fracking operations. But opposition to the shale boom has not gained political traction in the state capital.
It is harder to assess whether Obama or Romney benefits more politically from the state's rebound. The direct impact of the shale development so far has been led by the steel sector around Mahoning County -- Democratic Party territory. The lease payments have tended to go to thinly settled counties like Carroll, which went for GOP presidential candidate Sen. John McCain in 2008, 51 percent to 46 percent.
In general, most Ohioans are feeling a rising tide that goes beyond the oil and gas sector, Brown and other polling experts say.
General Motors Co. has announced plans to spend $220 million at two Ohio factories to build the next-generation Chevrolet Cruze compact car. The investment will secure the future of 5,000 jobs at factories near Cleveland and near Youngstown, GM says.
Obama backers quickly point out that it was his administration that delivered emergency loans to GM and Chrysler Corp. to keep their plants open in 2009, while Romney opposed the loans. (Romney's position was that the companies should go through a bankruptcy reorganization before receiving loan support.)
Read the rest of the article here.

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