Ohio’s Growing Shale Energy Industry Attracted $2.8 Billion in Direct Investment in First Half of 2022, With Cumulative Investment Surpassing $100 Billion
Prepared for JobsOhio, the latest report covers shale investment from January through June 2022 and cumulates total investment from 2011 forward.
COLUMBUS, Ohio, May 16, 2023 (GLOBE NEWSWIRE) -- Total investment in Ohio’s resource-rich shale energy sector was approximately $2.8 billion in the first half of 2022, according to a Cleveland State University (CSU) study. Prepared for JobsOhio, the latest report covers shale investment from January through June 2022 and cumulates total investment from 2011 forward. The study from CSU’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs revealed that, with previous investments to date, cumulative oil and gas investment in Ohio through June 2022 is estimated to be $100.6 billion. Of this, $70.8 billion has been in upstream, $21.5 billion in midstream, and $8.3 billion in downstream industries.
The study showed that cumulative shale investment steadily rose between 2016 and 2022, particularly with upstream investments. Overall upstream investments increased by about $628 million in the first half of 2022 compared to the second half of 2021, reflecting higher royalty earnings due to 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.
“In just over ten years, more than $100 billion has been invested in Ohio across natural gas, natural gas liquids, and petrochemical supply chain industries. Vital to our growing and diverse economy, this important sector continues to provide high-paying jobs to hard-working Ohioans,” said J.P. Nauseef, JobsOhio president and CEO. “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 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 Cleveland State University. “This increase indicates that the upstream industry has largely recovered from the supply chain problems that plagued the industry during the time of COVID.”
Upstream Investment
Upstream activities, such as drilling, roads, and royalties, accounted for nearly $2.8 billion of this total investment. As determined from Ohio Department of Natural Resources Division of Oil and Gas (ODNR) data for shale well drilling, operators drilled 113 new wells during the first and second quarters of 2022, nine fewer than the number drilled in the second half of 2019 – the last pre-COVID study period. Data also indicated that the total volume of gas-equivalent shale production in the first half of 2022 was 2.7% less than overall production in the second half of 2021.
Midstream Investment
Unsurprisingly, mid and downstream investments lag behind the upstream recovery. The first half of 2022 saw midstream investment of $37.1 million, around half the spending for this segment compared to the previous six-month period. Most midstream investment during the Study period ($30.8 million) was for gathering system buildout. Future midstream investment will include Ohio’s share of the $161 million Ohio Valley Connector Expansion project to increase takeaway capacity out of the region, which was actively under development as of March 2023.
Downstream Investment
There were no significant downstream investments during the first half of 2022. However, site work has recently begun on the $1.2 billion natural gas-fired Trumbull Energy Center near Lordstown. Also, construction on a second natural gas-fired power plant in Oregon, OH, is planned to commence in the coming year. Natural gas-based hydrogen projects will present additional downstream opportunities in the next few years.
Ohio’s Advantageous Environment
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, 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.
# # #
About JobsOhio
JobsOhio is a private nonprofit economic development corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention, and expansion. The organization also works to seed talent production in its targeted industries and to attract talent to Ohio through Find Your Ohio. JobsOhio works with six regional partners across Ohio: Dayton Development Coalition, Ohio Southeast Economic Development, One Columbus, REDI Cincinnati, Regional Growth Partnership, and Team NEO. Learn more at www.jobsohio.com. Follow us on LinkedIn, Twitter, and Facebook.
About the Maxine Goodman Levin College of Urban Affairs
The Maxine Goodman Levin College of Urban Affairs at Cleveland State University offers undergraduate, graduate, and doctoral degrees in fields that guide and advance vibrant and sustainable communities, including urban studies, public administration, urban planning, environmental studies, nonprofit management, and organizational leadership. Levin is recognized as one of the best public affairs schools in the nation, according to US News & World Report. Levin is ranked 3rd in the US in the specialty of Urban Planning and Policy, 7th in the specialty of Local Government Management, and maintains a strong standing in the specialty of Nonprofit Management.
Founded in 1964, Cleveland State University is a public research institution with nearly 16,000 students, 10 colleges and schools, and more than 175 academic programs. CSU recently was ranked No. 1 in the nation for increases in research expenditures, according to the National Science Foundation and was again chosen for 2019 as one of America’s best universities by U.S. News & World Report.
Matt Englehart JobsOhio 614-300-1152 [email protected]