Commentary: Rebound in Oil, Gas Demand Could Benefit Region

By Guy Coviello
President and CEO, Youngstown/Warren Regional Chamber

In 2014, I had the distinct pleasure of serving on the Tri-County Shale Coalition, created through a memorandum of understanding signed by the governors of Ohio, Pennsylvania and West Virginia. Four years earlier, due to shale development, especially in the Marcellus and Utica regions, production of oil and natural gas in the U.S. reversed course and the nation quickly became the No. 1 oil and gas producing country in the world.

Manufacturing jobs rebounded.

Ohioans saved millions on heating costs.

However, the oil and gas industry waned in the latter part of the 2010s. That was the result of low prices, inefficient technology and myriad other challenges.

Now, it’s déjà vu all over again.

Global demand for natural gas will increase by 41% by 2050, according to the International Energy Agency. Worldwide thirst for data centers, some of which require as much power as a small city, is driving that demand exponentially. And it’s not just data centers; across all industrial sectors, more automation consumes more power.

That means the tri-state area, especially the lake-to-river regions of eastern Ohio, western Pennsylvania and northern West Virginia, could again figure prominently in satisfying this appetite for power – that is, if our state and federal leaders create the right public policies to produce energy cleanly, safely and robustly.

Here’s a sample of what needs to happen:

• Pass a new version of the federal Energy Permitting Reform Act of 2024 so energy producing projects come online faster and less expensively. This includes a 150-day statute of limitations to file legal challenges, requiring courts to quickly rule on those challenges and setting a 90-day deadline for the Department of Energy to approve or deny liquified natural gas export applications, with automatic approval on day 91.

• Pass a new version of the federal Promoting Domestic Energy Production Act to allow U.S. energy producers to immediately deduct their intangible drilling costs when subject to the Corporate Alternative Minimum Tax, just like companies in other industries.

• Update Ohio’s regulatory environment to account for advancements in modern drilling and hydraulic fracturing that limit surface disturbances.

• Encourage in-state pipeline expansion in Ohio, especially through permitting reform so we can build more power plants, like the two in Lordstown, and more “behind-the-meter” power generation often demanded by large developers that need uninterrupted power.

• In-state pipeline expansion should include right-of-way access for a pipeline along state Route 11 from Lake Erie to the Ohio River.

The lake-to-river region is already experiencing generational growth in economic development. That’s because the post-Covid economy, coupled with pro-growth state economic policies, have led to onshoring and reshoring manufacturing here.

Abundant, reliable energy would help us attract even more businesses to the region. Abundant, reliable energy would keep home heating costs down, making us more attractive for a modern workforce. More energy exploration also positions the region, already a supply chain behemoth, to further prosper through the growth of mid- and downstream manufacturing and services.

The tri-state area is not just important to the region. It’s important to the world. Here are three more reasons why:

• Shale gas has led to a 38% reduction in emissions in Ohio, and 43% throughout PJM, a 13-state regional transmission organization that coordinates the movement of wholesale electricity.

• America leads the world in greenhouse gas emissions reduction, with nearly 60% of U.S. reductions occurring because of natural gas displacing higher emitting fuels.

• The tri-state area, already with access to the cheapest and one of the most abundant supplies of natural gas in the world, is now emerging as one of the potential leaders in oil production.

In analyzing how we stack up against others in a global economy, I like to look for a sustainable, competitive advantage. We have one, for sure – the energy below our feet.