New Report: Ohio Shale Industry Cumulative Investment Surpasses $100 Billion
A report released today by researchers at Cleveland State University and JobsOhio shows that since the beginning of the Shale revolution in 2011, the oil and natural gas industry has invested more than $100 billion into Ohio’s economy, acting as an essential economic lifeblood to the Buckeye State.
According to the report, total investment in Ohio’s shale-driven energy sector was approximately $2.8 billion in the first half of 2022. The study also displayed steady investment growth between 2016 and 2022, with overall upstream investments increasing by about $628 million in the first half of 2022 compared to the second half of 2021.
These monumental investments are due to the energy-rich Utica shale reservoirs right beneath Ohioans’ feet, and the revenues from their returns are helping to create jobs and fund schools, while simultaneously fueling Ohio and the world with reliable, clean, and affordable energy. In fact, a report released by the American Petroleum Institute today estimates that the industry provides roughly 351,000 jobs in Ohio, with natural gas and oil workers earning 65 percent more than the average worker, resulting in more than $25 billion in wages.
JobsOhio President J.P. Nauseef celebrated the $100 billion milestone and stated:
“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 Director of the Energy Policy Center at Cleveland University also touted the positive news in a statement:
“The 30 percent increase in the number of new wells drilled is responsible for most of the new spending in the first half of 2022. This increase indicates that the upstream industry has largely recovered from the supply chain problems that plagued the industry during the time of COVID.”
Additional highlights of the report include significant increases in royalty payments and new drilling:
Land Royalties: “Total estimated royalties spent on Ohio properties between January and June 2022 were nearly $1.6 billion, or about 36 percent higher than the amount dispersed in the second half of 2021.”
New Drilling: “A total of 113 new wells were listed by the Ohio Department of Natural Resources as “drilled,” “drilling,” or “producing” during the period of January 1 to June 30, 2022. This represents a 31.4 perceng increase in new well development compared to the second half of 2021.”
While upstream investments were incredibly strong, midstream investments were down 50 percent during the first half of 2022 compared to the second half of 2021. While the authors state that investments in Ohio will “likely be directed toward pipeline projects,” to ensure products are being brought to market, they also acknowledge that there are barriers to developing more infrastructure:
“The sustained discount at which regional gas has traded relative to the Henry Hub indicates that a pipeline constraint persists.”
Bottom line: Ohio’s oil and natural gas industry has contributed more $100 billion in investments to the state’s economy in the past decade, ensuring that roads, schools, and other community resources received the funding they need to promote a better quality for Ohioans. To continue this progress, it will be essential to ease pipeline constraints by removing regulatory roadblocks and permitting delays that inhibit the construction of new natural gas infrastructure in the Buckeye State.