Ohio Shale Coalition Exec Forecasts Economic Impact
SALEM, Ohio – Oil and gas development could mean a projected $4.9 billion increase in Ohio’s gross domestic product by 2014, the executive director of the Ohio Shale Coalition said.
That figure – representing a projected 1% increase in the state’s GDP, was just one of the statistics from a study prepared for the coalition and that Linda Woggon outlined Wednesday to members and guests of the Salem Area Chamber of Commerce at a breakfast meeting.
“A lot of local businesses are just beginning to make themselves aware of all the potential that’s starting to occur,” said Audrey Null, executive director of the Salem chamber. While there are some local companies participating in the industry, a lot are “just beginning to come out and educate themselves” as to the economic impact of the industry and what role they can play, she said.
“This is a real game-changer for our economy,” benefiting many different businesses, Woggon remarked. Last year the industry added $162 million to the state’s economy and the report, which covers 2011 through 2014, projected nearly $879 million this year. Output from the wells is projected to reach $9.6 billion annually by 2014, she said.
“The shale boom is really just starting here in Ohio,” she continued. “We can look to Pennsylvania to see what we might expect in the future but it’s really going to come on us fast. Although we’re seeing some drilling now, we see some wells producing in Ohio, we’re going to see a whole lot more over the next year or two.” The state has the opportunity to become not only self-sufficient but an exporter of hydrocarbons for the first time in more than a century, she noted.
Employment is expected to grow from an additional 2,275 jobs last year to 65,680 in 2014, for $3.3 billion in income.
She cautioned that the report takes a conservative approach. “We thought it was important when we did this not to raise expectations but to be realistic about what it may mean,” she said. Because it is so early in the shale play and not much information is available yet on downstream activity, the report mainly looks at upstream impact.
“We’re learning more about the geology every day,” said Mark Matusick, manager – corporate development for Chesapeake Energy. Because the Utica play is expected to be high in liquids, it is “very attractive” for companies like Chesapeake and others to invest in Ohio, he said.
Nevertheless, “Workforce development is a huge issue,” Woggon pointed out. “We need to make sure that we have folks trained to do these jobs.”
The high pay these positions offer may lure workers from existing companies, placing further demands on workforce development. Woggon also noted the problem of students being urged to pursue four-year degrees. “Not everybody fits there. Not all the good jobs are there,” she said.
Woggon also cautioned that the correct regulations need to be in place to protect the environment and people’s health. “We’re way ahead of that here in Ohio,” she remarked. “We have some of the toughest regulations here in the country so I think we’re doing it right. We just need to keep doing it right.”
In response to state Rep. Robert Hagan’s call for public hearings before the city of Youngstown votes on a proposal to lease mineral rights, she said there is “ample evidence that there’s not a lot that we need to worry about.” Hearings are fine “but we shouldn’t stop progress and we shouldn’t stop the growth of our economy,” she said.
Copyright 2012 The Business Journal, Youngstown, Ohio.