Appalachian Basin

*UPDATE* Unnecessary Delays Put Ohio Jobs At Risk

In an unfortunate turn of events last week, the Obama administration’s USDA Forest Service announced it would withdraw over 3,000 acres of public lands in the Wayne National Forest (WNF) scheduled for mineral lease sale in early December 2012. As The Washington Examiner reports, the move is effectively delaying the creation of over 200,000 Ohio jobs based, according to the Examiner, “in deference to environmentalists, on the pretext of studying the effects of hydraulic fracturing,” (Obama USDA delays shale drilling, up to 200k jobs, 11/18/11)

In her statement, Wayne National Forest Supervisor Anne Carey cites “increased public interest” as a basis for the delay:

From the release:

“Based on new information and increased public interest on natural gas exploration, especially deep horizontal drilling, the Forest will soon assemble a team of natural resource specialists to do further analysis,” said Carey. “This group will review the best scientific information available with regard to the surface effects of deep horizontal drilling and lateral hydraulic fracturing.”

The delay it seems is being presented as a necessary step to further study the effects of  the horizontal method used for the production of the Utica shale in the WNF. Ms. Carey, in her statement, identifies the  ‘surface effects’ of horizontal exploration as the primary objective of the study.

This is a tough pill to swallow in a state with unemployment levels at the national average of 9.0% and over 500,000 Ohioans out of work. In case your wondering, that number bests the population of every city in Ohio with the exception of Columbus.

It is important here to take note of the fact that, to date, nearly 1,300 oil wells have been developed in the Wayne National Forest. With no evidence of adverse environmental impact, including studies confirming this in WNF, this seems to be an odd development.

This is especially true considering horizontal laterals allow for well pads that have less surface impact, and a smaller environmental footprint, than any other source of energy production on a large scale. Understanding the horizontal method allows for multiple wells to be created through a single well pad, (as opposed to traditional wells that require multiple pads).  It’s easy to see how the process used to extract resources from the Utica shale (as is the case in Wayne National Forest) makes a much smaller impact than any of its counterparts.

For a good understanding of this its helpful to know how a horizontal well compares to a traditional vertical well, take a look at the illustrations below:


What is seemingly vexing in the Park Service’s call for further study is how this statement compares to studies conducted by the same government which extolled this process for the fact it “significantly reduced surface disturbances” and “impacts to wildlife.” A few examples of findings are below:

“The use of horizontal drilling has not introduced any new environmental concerns.  In fact, the
reduced number of horizontal wells needed, coupled with the ability to drill multiple wells from
a single pad has significantly reduced surface disturbances and associated impacts to wildlife,
dust, noise, and traffic. “ (Modern Shale Gas Development in the United States: A Primer, April, 2009)

  • In 2008, analysis was prepared for the U.S. Department of the Interior – the agency responsible for overseeing the USDA Forest Service – that used the Fayeteville Shale as an example of the minimized surface impact horizontal laterals enable against traditional vertical techniques:

“…a shallow vertical gas well typically would have a 2.1-acre well pad plus 2.7 incremental acres for associated process areas, access roads, utility corridors, etc., resulting in a total construction disturbance of 4.8 acres for each well. In contrast, a well pad for four or more horizontal wells in the same play would occupy only four acres plus incremental acres for associated process areas, access roads, utility corridors, etc., resulting in a total of 7.4 acres disturbed. Thus, sixteen vertical wells with individual pads and roads would disturb 77 acres, more than 10 times the area of horizontal wells capable of producing the same natural gas. This difference in development footprint is significant in rural and urban settings.” (Technologies Reduce Pad Size, Waste, August 2010)

The state’s ability to effectively regulate it’s own industry is well demonstrated in Ohio and should also be taken into consideration in limiting surface impacts from natural gas production. In fact, the decision in delaying the sale seems in direct conflict with the opinion  of the U.S. EPA’s chief Administrator Lisa Jackson. In a recent interview with energyNow!, the EPA head stated:

“We have no data right now that lead us to believe, one way or the other, that there needs to be specific federal regulation of the fracking process,” (Shale Oil, The Rush for Black Gold, 11/20/11).

Again, in an interview this morning on MSNBC’s Rachel Maddow Show, Ms. Jackson reaffirmed her statement on states being able to regulate themselves:

“Now, states are stepping up and doing a good job, so I always say, it doesn’t have to be the EPA that regulates the ten thousand wells that might go in.” (9:00)

Ms. Jackson also commented on the importance of shale development in the United States:

“As an environmentalist, I actually think natural gas is important for our country. I do think that it is a potential big change for us, it has immediate benefits from a pollution side, immediate benefits from an energy security side.” (8:36)

So, in the context of all of this why is an agency from the federal government, arguably representative of Washington, D.C., unnecessarily delaying what is certainly a high priority  for Ohioans?  It begs the question posed by Ohio Congressman Bob Latta last week in his OpEd for Politico:

“The fundamental question that must be asked is: Who is best suited to protect the health and safety of Ohioans — experienced Ohio regulators and geologists, or somebody in Washington?” (11/13/11)

Ohio has a long history of safe energy exploration and production, and has been recognized as having some of the most stringent regulations and regulatory agencies in the nation by peer-review. In 2010, Governor Ted Strickland signed Senate Bill 165 into law. The bill, passed through the state house and senate with bi-partisan support, was a comprehensive update to Ohio’s existing regulations in Ohio Revised Code 1509. It was the largest overhaul of oil and gas law in more than two decades, designed to address many public concerns as well as new technologies.

In January of this year, The State Review of Oil and Natural Gas Environmental Regulations (STRONGER) conducted a peer review of Ohio’s regulations and regulatory agencies. STRONGER is a workgroup consisting of state regulatory agencies, environmental organizations and industry groups. The review team concluded that the Ohio program is “well-managed, professional and meeting its program objectives” (STRONGER Report, January 2011).

The fact is, Ohio is doing just fine without federal interference in Ohio energy production and Ohio job creation.

With the state continuing to suffer high unemployment in a stagnant national and local economy, we can ill-afford an unnecessary delay in the job creation that production of our natural resources – the Utica shale – will provide. And make no mistake; this is an unnecessary delay.

Ohio, and the eastern region as a whole, continues to suffer from high unemployment. Today, the released the October 2011 Civilian Labor Force Estimates. The levels of unemployment in the 12 counties comprising the Wayne National Forest region are a staggering 10.075% – well above the state and national average:

Civilian Labor Force Estimates
For: Oct-2011
County  C.L.F.  Emp.  Unemp.  Rate
Athens County 28900 26400 2500 8.8
Gallia County 13800 12600 1300 9.2
Hocking County 14000 12700 1300 9
Jackson County 14800 13200 1600 10.8
Lawrence County 29100 26700 2400 8.2
Monroe County 5600 5000 600 10.4
Morgan County 5800 5100 700 11.4
Noble County 5700 5100 700 11.4
Perry County 16400 14700 1700 10.5
Scioto County 32500 28500 4000 12.2
Vinton County 5500 4900 600 11.4
Washington County 32500 30000 2500 7.6
Average: 10.075

(Source: Ohio Department of Jobs and Family Services, November 22, 2011)

The Utica Shale is the economic opportunity we’ve been waiting for. Our state cannot afford halted progress on what amounts to an appeasement study, nor wait any longer to devote our efforts to ensuring the economic recovery the development of our natural resources will provide. We need jobs, not Washington interference.

Ohio has the audacity  to lift ourselves back to prosperity,  and we can do it with state-regulated development of the Utica Shale. Yes we can.

Update – December 2, 2011

In this morning’s Wall Street Journal, Ohio Treasurer Josh Mandel echoed the call for Washington to remove itself from the conversation on Ohio’s energy development future.

Ohio, as Mr. Mandel points out, has an extensive track record of successful, stringent self-regulation as it relates to oil and gas development and production at all stages.

In his OpEd, “Washington Targets Ohio Shale Gas,” Mr. Mandel poses the question asked by EID-Ohio, serveral Ohio representatives (including Congressmen Bob Latta  – see above), and the tens of thousands of unemployed Ohioans who stand to benefit from good, well-paying jobs due to the development of the Utica shale:

“On the same day two weeks ago, Ohioans saw the following diverging headlines:

In the Cleveland Plain Dealer: “Republic Steel to add 450 jobs to Lorain as oil and gas exploration booms.” This story reported Republic Steel’s announcement of new jobs in one of Ohio’s hardest-hit counties, to manufacture products in support of the state’s growing oil and gas industry.

In the Marion Star: “Ohio national forest halts sale of drilling rights.” This story reported the U.S. Department of Agriculture’s decision to suspend the auction of leases for oil and gas drilling on more than 3,000 acres of federal land in the most economically depressed region of Ohio.

You might be asking yourself: Why would Washington block drilling in Ohio at the same time that Ohio manufacturers are adding jobs to support the state’s growing oil and gas exploration? Thousands of middle-class families and out-of-work Ohioans are asking that same question. ” (Washington Targets Ohio Shale Gas, 12/2/11)

In calling out Washington leadership to understand the potential economic impact the Utica shale brings – and what the unessecary interference from the federal government threatens – Mr. Mandel highlights the vast opportunity this development brings to our state:

  • A September study for the Ohio Oil & Gas Energy Education Program found that production in the Utica shale formation has the potential to create more than 200,000 Ohio jobs by the year 2015.
  • Beyond employing men and women on the rigs, this exploration will produce new jobs for construction workers, truck drivers, hardware-store clerks, hotel maids, restaurant servers and many other laborers who provide goods and services to exploration operations. In its most powerful possible effect, the Utica shale will create thousands of new manufacturing jobs in Ohio. (Washington Targets Ohio Shale Gas, 12/2/11)

In yet another reminder to our friends in Washington, Mr. Mandel trumpets impact the Utica shale play has had in bringing about the return of the once-lost, now suddenly resurgent Ohio steel industry:

Along with Republic Steel, U.S. Steel has also announced new jobs and expansion in Ohio, in its case to meet demand for steel piping created by shale exploration. Vallourec & Mannesmann plans to build a plant in Youngstown, breathing new life into the heart of the rust belt. The Canton-based steel manufacturer Timken recently said that its planned expansion is motivated in part by strong sales to oil and gas companies, which make up 20% of the company’s sales. (Washington Targets Ohio Shale Gas, 12/2/11)

Of the key points Mr. Mandel makes (and there are many within this piece), the one we hope resonates with Washington at the highest volume relates to Ohio’s extensive history in responsible oil and gas development and comprehensive, stringent regulations we already have in place:

Shale exploration occurs safely and responsibly. Ohio has rigorous, common-sense regulations that are based upon bipartisan legislation signed by former Democratic Gov. Ted Strickland. The national Ground Water Protection Council issued a study in August that said, “Ohio has implemented more detailed notification, inspection, record keeping and reporting requirements in response to the national debate on the process of hydraulic fracturing.” A January examination by the State Review of Oil & Natural Gas Environmental Regulations concluded that Ohio’s regulatory system is “well-managed, professional and meeting its program objectives.” (Washington Targets Ohio Shale Gas, 12/2/11)

EID-Ohio applauds Mr. Mandel for raising the volume on a subject of dire importance to Ohioans across the board. We join our Treasurer in calling on Wahsington to remove itself from the Ohio conversation on our energy development, our energy security, and our return to economic prosperity:

…allow us to maximize these resources for economic strength and national security.” (Washington Targets Ohio Shale Gas, 12/2/11)


1 Comment

Post A Comment