YOUNGSTOWN, Ohio – A Lake to River natural gas pipeline could transform economic development, enabling the region to capitalize on its oil and gas resources and take advantage of development interest.
That’s the conclusion of a Lake to River: Oil & Gas Pipeline Feasibility Study released Monday. Eastgate Regional Council of Governments and Lake to River Economic Development sought the study, which was prepared by Verdantas, an environmental science, engineering and consulting firm.
But officials emphasize the study is only an early step.
Eastgate led the study, with funding provided through Ohio’s most recent capital budget.
“Eastgate is a planning agency and looking ahead and identifying opportunity for our region is what we do,” Jim Kinnick, Eastgate executive director, said in a news release. “This has been part of the conversation in our region for close to two decades and this study was a chance to finally see what the possibilities actually are. There’s a lot of work still ahead of us, but this is a meaningful first step.”
Dani Robbins, Lake to River CEO, agreed.
“This study gives us a clearer picture of what it would take to build an energy infrastructure to connect our four-county region, which would allow us to attract the kind of long-term investment that raises wages and creates opportunities,” she said in the news release. “What gets built, and when, is still undetermined. But understanding what’s possible is exactly the kind of groundwork this region needs to keep growing.”
Lt. Gov. Jim Tressel said in the news release that the state recognized the value of helping Lake to River and Eastgate better understand the region’s infrastructure needs and the feasibility of natural gas or oil pipeline infrastructure to support future business investment.
“This study provides a clear, unbiased analysis that will help inform decisions about whether and how the opportunity should move forward,” he said. “Evaluating opportunities like this supports the work of Lake to River and JobsOhio and Gov. [Mike] DeWine’s goal of ensuring every Ohioan has the opportunity to reach their God-given potential.”
State Rep. Nick Santucci, R-64th, majority whip and Lake to River Caucus chairman, said energy infrastructure that connects communities across Eastern Ohio represents the kind of long-term regional thinking that can strengthen the region’s competitiveness for generations.
“This study will provide our communities and economic development partners with important information as they evaluate the region’s future infrastructure needs and opportunities. Planning today will help position Eastern Ohio for continued investment, job creation and economic growth for decades to come,” Santucci said.
The study’s preliminary analysis found significant need and potential for a natural gas pipeline along state Route 11 stretching between Ashtabula and Columbiana counties.
“Despite rich natural gas resources and advantages, the Lake to River region lacks sufficient pipeline and distribution infrastructure required to deliver gas,” its executive summary reads.
And gas production in the region doesn’t support local end users despite their demand for all energy types.
“The energy environment of the region could be drastically transformed if the right transmission infrastructure were in place to adequately supply existing and future industrial manufacturers,” the study says.
It pegs the cost of such a pipeline at $1.3 billion, and it suggests a public-private partnership model, or P3, to pursue it. That model integrates public-sector sponsorship with private-sector development, financing, construction and operating expertise.
“Under this framework, the public sector provides policy leadership, intergovernmental coordination, regulatory support, land access facilitation and incentive alignment,” it says.
Expectations for the private sector’s primary responsibility would be project development and execution.
“This allocation of responsibilities is intended to leverage private-sector efficiency and specialized capability while preserving public oversight and responsibility,” the study’s executive summary reads.
The study also found that Route 11 and energy needs align favorably with development suitability.
“The Lake to River region has significant development potential for industrial development, data centers and logistics with many of these areas being located in close proximity to” Route 11, it says.
An analysis found overlaps in areas with high industrial development suitability and areas with the highest energy demand.
“This indicates a favorable scenario for using pipeline development as a catalyst for economic development and meeting local energy needs,” the executive summary says.
It also found significant economic growth potential for the proposed pipeline. “Market changes created by increased natural gas access provide clear pathways with documented” returns on investment for expanded industrial development, the executive summary reads.
It also says industrial growth following the pipeline will support spinoff jobs in the region, including wholesale trade, professional and medical services. “Overall, there is clear evidence for pipeline construction to be a sustainable, long-term economic tool in the Lake to River region,” the study reports.
It also asserts that pipeline development is meaningful for all parties involved, both locally and regionally. It says landowners of wells, natural gas utility workers, local businesses and economic development organizations have something to gain from development of a pipeline.
“However, in regions that lack adequate gas infrastructure, like Lake to River, the primary economic argument is not just the pipeline itself, but the industrial development, job creation and tax base growth that the pipeline enables,” the study says.
The next step is for Lake to River to distribute a request for information to identify parties interested in forming a partnership with Lake to River to “deliver the technical, financial and operational capabilities needed to realize this pipeline.” The study lists the party’s requirements for its role in the natural gas market, interest in a partnership role, proof of financial capability, project backlog and pipeline, approach to technical, environmental and regulatory processes, relevant experience and long-term commitment outlook.
Responses to that RFI process will determine what, if anything, moves forward and on what timeline.
It says those who conducted the study interviewed regional natural gas industry leaders to measure interest and their feasibility to serve the region. They interviewed more than 14 industry representatives that aren’t identified in the report.
“Conversations with energy corporations revealed that many industry leaders have existing business plans and earmarked capital to invest in a regional pipeline to span all or parts of the four-county region,” the report says.
At least three firms were “highly interested” in investing in the proposed project, it says.
Of those interviewed, most were interested in being involved in transmission, with a few having more varied interests including gathering and liquefied natural gas.
“Continued and enhanced financial incentive coordination across the four-county Lake to River region will be critical to advancing P3 pipeline development efforts,” the study says.
Part of the study involved a survey of manufacturers within the region to understand the latent demand that exists or could emerge from manufacturers expanding operations or their changing energy consumption patterns. There were 30 total respondents – 27 established manufacturing operations and three with planned operations – representing various manufacturers in the region that would benefit from favorable energy conditions to initiate their projects.
Among the questions in the manufacturers’ survey were those regarding their expected future demands, production outlook and process changes.
“About 40% of respondents indicated that they expect an increase in production of 1-10% within the next five years, while an additional 22.2% of respondents reported an expected increase in production of 11-25%,” the report reads.
In association with the increase in production, 57% of respondents expect a net change in electricity demand of 1% to 10% over the next five years, with 21% expecting an increase of 11% to 25%.
“While it appears electricity demand is likely to grow, natural gas expectations are less consistent,” it says.
The executive summary lists financial incentive programs applicable to pipeline development and of special interest to the project partners, including establishment of a Regional Transportation Improvement Project, new Opportunity Zone nominations this year, future Maritime Prosperity Zones and U.S. Department of Energy Office of Energy Dominance Financing.
The Lake to River region is situated within the U.S.’s Shale Crescent region, “which has become one of the premier global energy assets for natural gas production,” the study’s executive summary reads. It says the region is unique in that it features low-cost natural gas production near dense concentrations of industrial consumers and world-class infrastructure.
“If this three-state region encompassing parts of Ohio, West Virginia and Pennsylvania were its own country, it would rank as the third largest natural gas producer in the world,” according to the summary.
And natural gas production in the Shale Crescent is expected to grow 50% over the next 25 years.
But the region lacks pipeline and distribution infrastructure sufficient to deliver natural gas resources to local communities and industrial users.
“The study found that there is widespread demand for all types of energy, not just natural gas,” the summary says. “However, existing regional manufacturers are sensitive to price fluctuations and could benefit greatly from a stable source of energy that a natural gas pipeline could supply.”
By contrast, the study says, new demand represents future consumption generated by development that’s enabled by the pipeline, such as the attraction of an anchor industrial user or energy center.