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Shale Database to Connect Buyers with Suppliers
CAMBRIDGE, Ohio -- Imagine the name of your business, a description of what you do and where you can be contacted on the computer screen of every major oil and gas drilling company rushing to strike it big in Ohio’s Utica shale play. And all you had to do was register online.
The prototype for what soon will become a statewide shale energy supply chain database will now be launched at the end of May, not April 30 as initially reported. The effort is being coordinated by the Consortium for Energy, Economics & the Environment at the Voinovich School of Ohio University.
“What we’ve got right now is a database that easily can be expanded statewide, can easily be expanded to other states, and it really won’t take that much,” says Scott Miller, director of energy and environmental programs at the Voinovich School.
The goal of the database is to link manufacturers, suppliers and service agencies to oil and gas exploration companies working in Ohio by using online mapping technology to help them acquire contact information for everything they need, from raw materials to finished products.
The hope is that out-of-state energy companies will save time and money by using the database, giving local companies a competitive edge in winning supply contracts.
Although the Voinovich School initially set up its Ohio Shale Energy Database for companies in 12 counties in southeastern Ohio, it is expanding to cover all of Ohio, Miller says. Companies can register contact and basic information at OhioShaleEnergy.com.
David Mustine, general manager for energy at JobsOhio, says, “It’s just one piece of a lot of activity around supply chain development in the state.”
The Ohio Shale Coalition, the Ohio Oil and Gas Education Program, the Ohio Chamber of Commerce, and others including WireNet, which set up a supply chain database through the Great Lakes Wind Network, will be involved in statewide efforts to identify and engage Ohio companies, Mustine says.
“It’s big, it’s complex, and there’s a lot of pieces to it,” he says. “There’s going to be a lot of participants in the development of the supply chain network.”
Already JobsOhio has begun to engage oil and gas companies and their tier one suppliers by asking for contact information for key vendors, Mustine says. The development corporation is also attempting to identify out-of-state companies that plan to set up operations in Ohio – now and down the road.
“Through the JobsOhio network, we’re going to be contacting companies in the supply chain to get a sense of projects they’re looking at to grow their business in this industry,” Mustine says.
Development organizations cultivating the supply chain network will work with companies to identify what they can do to help them get contracts and identify other Ohio companies that could be in the supply chain, Mustine says. The organizations may also recruit companies to come to Ohio to fill any gaps where the oil and gas industry is buying products and services, but lacks suppliers in Ohio.
“There’s a lot of activity that all has to work together for us to be successful, but it’s under way,” Mustine says.
Mustine was one of a dozen speakers at the recent Ohio Shale Energy 2012 conference in Cambridge, convened by the Voinovich School.
Ohio University received a grant in November to compile a database of companies to be evaluated and analyzed for supply chain use. The initial database focused on companies that do business in Athens, Belmont, Coshocton, Guernsey, Harrison, Jefferson, Monroe, Morgan, Muskingum, Noble, Tuscarawas and Washington counties.
The U.S. Department of Agriculture Rural Business Enterprise Grant awarded the project includes studying the effects a supply chain has on the Appalachian counties. The counties selected have unemployment rates that exceed the state averages and median household incomes below the state average.
“We’ve got a grant that we’ve got to meet, and we’re going to build out the rest of the state in the immediate future,” says the Voinovich School’s Miller.
“We’re focused on 12 counties, but we know that the shale supply chain doesn’t stop at 12 counties. It doesn’t even stop at the state line,” he explains. “We’ve got something that’s unique, that could be very useful for the state and that could be an economic driver.”
Everyone who attended the Ohio Shale Energy conference, including a handful of participants from the Mahoning Valley, was automatically registered into the database. Companies outside the 12-county area can register at OhioShaleEnergy.com. When the database goes online, it will be posted at the same domain.
Conference participants were told how companies in the Port Arthur, Texas, region profited from a similar effort. There government officials, educators, and local workforce agencies worked directly with the oil and gas companies to keep supply contracts local through an eight-county database the oil companies put together for the expansion of the Motiva Port Arthur refinery project (http://www.motivaexpansionproject.com/default.aspx).
Several key players – Shell, Bechtel, Saudi Aramco – supported an initiative that implemented local content for contracting and employment “to ensure local firms in Port Arthur as well as greater southeast Texas have ample opportunity to compete for a sizeable portion of the economic activity spurred by the expansion,” states the project’s website.
As part of the project, the companies identified local suppliers and contractors related to the needs of the refinery plant.
Through the database, the energy companies learned the size, capabilities and credentials of the companies, then tailored bid packages based on local capacities. The energy companies also worked with community colleges to help build up a workforce by supplying mentors and advice.
While different than the Ohio model, the Port Arthur refinery project is an example of how a supply chain database can benefit economic development anywhere, conference participants learned. And the idea of an energy supply chain is nothing new to the state or Voinovich School.
“We came at this from some work we’ve been doing in the state for the last five years or so trying to build out a database for several different industries,” Miller says. The Voinovich School worked with the Ohio Department of Development to construct a wind-energy database and is working now to build a solar-industry database.
“It was a natural pivot for us to look at the largest energy issue in Ohio” – oil and gas, Miller says.
Editor's Note: This story was first published in the May print edition of The Business Journal. To subscribe, click here.
Copyright 2012 The Business Journal, Youngstown, Ohio.