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CSU Study Finds 'Moderate' Shale Activity in Valley
YOUNGSTOWN, Ohio --A quarterly study released by Cleveland State University shows that Mahoning and Trumbull counties demonstrate "moderate" oil and gas activity in eastern Ohio's Utica shale, while other counties to the south are experiencing stronger returns.
The Ohio Utica Shale Gas Monitor, written by Edward N. Hill and Kelly Kinahan of CSU's Maxine Goodman Levin College of Urban Affairs, also notes that while overall revenues from sales taxes have increased among shale-active counties, the level of employment has not yet matched that pace.
"Overall, I'd say it's a positive report," says Shawn Bennett, spokesman for Energy In Depth, an oil and gas outreach group based in Cambridge.
Regions experiencing moderate shale activity such as the Mahoning Valley have shown signs of employment growth because of jobs related to pipeline and processor construction, as well as manufacturing positions with companies that supply the industry, Bennett says.
"The moderate shale areas are actually seeing growth in employment," he says."You're seeing a lot of ancillary jobs," such as hiring at Vallourec Star Inc.'s new pipe mill in Youngstown, and expansion at Dearing Compressor & Pump Inc. in Boardman.
In a previous CSU report issued in August, Mahoning and Trumbull counties were rated as "strong" in respect to Utica shale activity and were lowered to "moderate" in the latest study. Conversely, Jefferson, Monroe, and Noble counties -- counties earlier classified as either "moderate" or "weak" -- are now ranked "strong" in the latest report.
This denotes a shift among energy companies to step up infrastructure, exploration and well development in the southern tier of the Utica play rather than the northern portion encompassing Trumbull and Mahoning counties.
Columbiana County's status remained unchanged at "strong" in the latest report.
Sales tax receipts among those counties classified as strong or moderate were up significantly in 2013 through the month of August, the study shows.
The eight counties rated as strong collectively saw an 11.2% increase in sales tax revenues during a 12-month period ended Aug. 30, the report says. During the first eight months of 2013, these counties collected a total of $3,451,677,891 in taxes.
Counties rated as moderate also saw strong sales gains through the second quarter of 2013, the report shows. During the quarter ended June 30, Mahoning, Trumbull, Stark, Portage, and Tuscarawas counties together witnessed a 10.5% increase in sales tax revenues.
Through the first eight months of 2013, these counties collected $1,025,278,671 in sales receipts.
By comparison, counties further to the west or northwest -- those considered weak in shale activity or classified as "non-shale" counties – saw lower percentage growth. Weak shale counties witnessed a 7.9% increase, while non-shale counties registered a 5.7% increase.
However, employment growth among residents in shale-related counties stagnated, and in some cases, declined through the second quarter of 2013, the study reports.
For example, the study points out that employment in counties strong in shale development actually decreased 0.8% during the second quarter of 2013 compared to the same period a year earlier.
Among moderate shale counties, employment grew just 0.4%, the study shows.
"Employment in counties with strong shale activity remains a challenge, with relatively flat employment rates through the second quarter of 2013," the report says. "Hiring is taking place in metropolitan areas in the moderate shale counties where field service firms have established operations."
Energy In Depth's Bennett says that there were several external factors that contributed to employment decline during the period, especially in strong shale areas.
The Ormet aluminum plant in Monroe County, for example, shut down its operations during this period that impacted surrounding communities in nearby Noble County as well.
"It had a wide-ranging effect in the southern tier," he says, eliminating 700 jobs in the region.
Also, the coal industry is experiencing a period of retrenchment, which is prevalent in the shale-strong counties in the southern Utica, Bennett says. "The industry lost 265 jobs from the first quarter of 2012 to the first quarter of 2013."
Permits for new horizontal wells continued at a rapid clip in 2013, the report says. During the second quarter, 164 new wells were permitted by the Ohio Department of Natural Resources, an increase of 312% compared to the same quarter in 2012.