Appalachian Basin

Toledo a Prime Example of Benefits of Natural Gas Lifecycle

In 2015 Harvard Business School and Cleveland State University correctly forecasted that shale development would lead to a win-win for the economy and the environment. Nowhere have these forecasts proved more spot-on than the Buckeye State, where $63 billion in shale-related investment is powering Ohio’s economy at the same time the state is leading the country in carbon reductions.

The benefits of the shale gas revolution have been particularly evident of late in the Toledo region of northwest Ohio, which is enjoying a windfall of shale-related investment — including everything from billions of dollars for new natural gas-fired power plants, to a $60 million methanol plant and a $700 million iron ore plant — thanks to a rapidly expanding energy infrastructure network. These projects have brought hundreds of construction and permanent jobs to the Toledo region.

While the core Utica Shale production counties are about a four-hour drive from northwest Ohio, cheap natural gas and a growing network of pipelines have brought (and will likely continue to bring) long-term manufacturing jobs that will support this industrialized region for years to come. As City of Oregon Administrator Mike Beazley recently told EID,

“There is no doubt that had these new pipelines and natural gas power plant(s) not been here, we would not have landed these manufacturing plants in our region. They needed the energy infrastructure to come and now we have it and we continue to see more interest to the region as result of these initial investments. There’s a real trickle-down effect that’s occurring and what’s exciting is that these manufacturing plant are providing long-term jobs to our community.”

The natural gas lifecycle is in full swing in northwest Ohio and here’s how it’s happening:

As Gary Thompson, Executive Vice President and Chief Operating Officer of the Regional Growth Partnership of Northwest Ohio, recently told EID,

“Our legacy is industrial manufacturing and we have continued to thrive as a premier energy provider. Both are happening again in the region with these new gas power plants, pipeline infrastructure, and manufacturing growth. We are a lot like Houston, Texas, in northwest Ohio in that we are a distance from the oil field, but we have the infrastructure here to actually support these industrial projects. There’s no question that our region has a competitive advantage now and we plan to fully embrace that to encourage more investment here.”

So how exactly is this happening?

As EID recently discussed, the ongoing shale renaissance caught the attention of natural gas power plant developers early on. In 2013, the Ohio Power Siting Board granted a Certificate for Environmental Compatibility and Public Need for the construction and operation of the Oregon Clean Energy Center (OCEC). As part of the 870 megawatt (MW) plant project, construction of a new high-pressure steel natural gas pipeline was needed to provide adequate support for the facility. But that now completed pipeline wasn’t just built to support OCEC. With the capacity to bring 330,000 MMBtu/day, the pipeline is capable of serving other facilities as well. And as a result, that new pipeline led to the region getting a $60 million methanol and sodium methylate plant, according to JobsOhio,

“Company executives needed a location with easy access to both customers and a large supply of low-cost natural gas. The site gives company executives the proximity they want to key customers and major markets. It also offers a stable electrical supply and access to a brand-new, high-pressure gas pipeline that feeds from the Oregon Clean Energy Power Plant.”

The methanol project is currently under construction and will bring 40 permanent jobs to the region. Recall that even before this plant was under construction, Cleveland State University reported in 2015 that a methanol plant would come to Ohio. From the CSU report,

“Methanol is used as a feedstock in the production of many products that are used on a daily basis, including plastics, paints, and adhesives, as well as transportation fuels. While methanol can be produced from a variety of sources such as biomass, its primary feedstock is natural gas.” (Emphasis added)

Over the course of the past few years, construction of major interstate pipelines, such as the NEXUS and Rover, have been underway to bring Marcellus and Utica Shale gas to markets. These two major natural gas pipelines traverse the state of Ohio, passing through northwest Ohio, adding even more energy infrastructure to the region. As a result, northwest Ohio has permitted another 950 MW natural gas power plant, and it was just recently announced that a $700 million iron ore plant is moving ahead as well. This plant is expected to bring 1,200 construction jobs and create at least 130 permanent positions making hot briquetted iron for the manufacturing of steel.

When it comes to the resurgence of steel manufacturing, the following comment by U.S. Rep. Marcy Kaptur (D., Toledo) are words Ohioans probably thought they’d never hear again, but are now a reality thanks to shale,

“A big Toledo welcome to Cleveland-based Cliffs Natural Resources as it embarks on new corporate investment to serve the American steelmaking market,” (emphasis added)

Prolific production of natural gas from the Appalachian Basin has led to a surge of energy infrastructure all over the state, and an incredible example of this transformation is occurring in northwest Ohio, proving that production of oil and natural gas in southeast Ohio is quite literally impacting every corner of the state. In addition, we must also pay homage to the fact that Ohio is simultaneously leading the country in carbon emission reductions, thanks largely to increased use of locally produced natural gas for electricity generation.

As the Harvard Business School reported in 2015 and is certainly proving to be true in northwest Ohio, shale development is:

“perhaps the single largest opportunity to improve the trajectory of the U.S. economy…and can not only help restore U.S. competiveness but can also create geopolitical advantages for America…while substantially mitigating local environmental impact.” (emphasis added)





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