Study: Ohio Shale Investments Surpass $100B
COLUMBUS, Ohio – A Cleveland State University study shows that more than $100 billion has poured into Ohio’s oil and gas industry since 2011, when energy companies began exploring the Utica/Point Pleasant shale formation.
According to the study, commissioned by JobsOhio and conducted by CSU’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs, the shale industry accumulated $100.6 billion worth of investments between 2011 and 2022, JobsOhio said in a press release.
The majority of this investment – $70.8 billion – has been in upstream development, that is, exploration and horizontal drilling programs throughout the state that also factor in construction and royalty payments.
Another $21.5 billion was devoted to midstream activity, such as processing and pipelines, while $8.3 billion was invested in downstream industries, the study shows.
“In just over 10 years, more than $100 billion has been invested in Ohio across natural gas, natural gas liquids and petrochemical supply chain industries,” said J.P. Nauseef, JobsOhio president and CEO. “Vital to our growing and diverse economy, this important sector continues to provide high-paying jobs to hard-working Ohioans. Manufacturers worldwide are now realizing that Ohio is one of the most advantageous states for natural gas and natural gas liquids consumption – that feedstock, combined with our infrastructure, access to end-use markets, and the highly-skilled workforce that calls Ohio home.”
The study showed that cumulative shale investment rose steadily between 2016 and 2022, particularly with upstream investments.
During the first half of 2022, total new investment in Ohio’s oil and gas industry stood at approximately $2.8 billion.
Overall upstream investments increased by about $628 million, or 30%, during the first half of 2022 compared with the second half of 2021, reflecting higher royalty earnings because of higher oil and gas prices and new well development. Indirect downstream investment, such as the development of new manufacturing due to lower energy costs, was not investigated as part of this study.
“The 30% increase in the number of new wells drilled is responsible for most of the new spending in the first half of 2022,” said Andrew Thomas, director of the Energy Policy Center at CSU. “This increase indicates that the upstream industry has largely recovered from the supply chain problems that plagued the industry during the time of COVID.”
In December 2022, JobsOhio released a study from Shale Crescent USA, a nonprofit focused on promoting the manufacturing advantages created by abundant natural resources available in Ohio, Pennsylvania and West Virginia, that dispels the long-held belief that plastic-based goods are cheaper to import than manufacture locally. The study revealed that the low-cost gas and natural gas liquids flowing from the U.S. Shale Gas Revolution has the potential to turn the $53 billion U.S. plastics importing industry on its head.
Of that $53 billion in imports, nearly half originate in Asia, with China alone accounting for $25 billion. However, since the COVID-19 pandemic spotlighted the financial and logistics benefits of shorter supply chains, Ohio has surpassed China as the world’s low-cost center for plastics manufacturing, thanks to advantages in cost, economic climate and market access.This is the 13th CSU study reporting investment resulting from oil and gas development in Ohio related to the Utica and Point Pleasant formations. The latest report and previous reports can be found HERE. For more information on Ohio’s growing energy industry, visit www.JobsOhio.com/energy.
Published by The Business Journal, Youngstown, Ohio.
