Think the Utica is Just for the Big Producers? Think Again.
I am the President and owner of Duck Creek Energy, Inc. founded in 1983. I also formed JDS Energy Systems, Inc. in 1983 as one of the first natural gas marketing companies in the Country. I was formerly Manager-Administration of Republic Steel Corporation’s Oil and Gas Division and it has produced and operated over six hundred and fifty (650) wells in four (4) states during his career.
The traditional oil and gas producer has always been the small family run independent producer. Well, that’s not totally true. Back in the 1960’s and 1970’s little guys like Pennzoil and Phillips Petroleum actually were developing leasehold positions in the State. And way back when a small company called Standard Oil was founded in Cleveland by a guy named Rockefeller.
But, over the years the bread and butter Clinton Sandstone became the formation most often developed and independent business flourished in the state. Since then the Clinton Sandstone has contributed significantly to the economy of Ohio both in jobs and royalty income to residents and to the state in the form of income, ad valorem and severance taxes.
The independent producer has explored below the Clinton into the Trempeleau and Rose Run formations with some success bypassing the Utica Shale on the way down to these resources but was never able to unlock the potential of the shale Utica shale play. Over the past year and a half, large players such as Chesapeake Energy have been leasing the deep rights below our Clinton Sandstone and have invested billions of dollars into the state’s economy and to residents’ here while developing a lasting, homegrown energy supply for the nation.
Many small independent producers may be skeptical or reluctant to rejoice in the major independents or majors running up lease prices. But, the fact is we weren’t really developing the Utica and the major independents are only interested below the Clinton Sandstone, our bread and butter.
The Utica needs midstream and downstream infrastructure to move the product from prospect to pipeline. Smaller independent groups will also benefit from the new midstream capability to convert the “wet” gas to “dry” gas and to move the gas to the East Coast for end users displacing other foreign energy sources with American natural gas. The change is truly revolutionary for this country, in terms of developing thousands of good paying jobs in not only the oil and gas industry but the supporting industries as well (just ask the American Chemistry Council). In addition to jobs this resource creates it is also reducing the flow of cash out of our country while keeping that money, and hopefully our troops, at home.
The nay-sayers will try to stop development with terms like the “land grab is on” or will throw up red herrings like water contamination despite the fact there has never been a documented case of a water well tainted as a result of hydraulic fracturing. As many Ohioans know we can’t afford to wait to develop this resource. Our economy has faltered for too long and the technology has been proven successful over one million times. Indeed, the time to move forward is now.
The following are pictures of a vertical pumping unit in Thornton Municipal Park, Shaker Heights, Ohio. Behind the hill is the children’s sled riding hill which adjoins the swimming pool and hockey center. As you can see from these pictures natural gas development is part of the fabric of our community and it exists hand-in-hand with our daily lives with no intrusion or interference.
I look forward to the exciting benefits that Utica Shale development will bring and I am confident that like in the past Ohio’s independent producers, and the larger national producers, will develop this resource in a safe and responsible manner that will increase Ohio’s economy while protecting the environment we appreciate and cherish.