Appalachian Basin

Utica Shale Development is Improving Our Economy and Providing Jobs for Ohioans

At a recent event honoring the Ohio State University football team, Gov. John Kasich noted “deep concern” regarding the notion that our oil and natural gas industry “may not be hiring Ohioans.” The governor remarked: “You could have a situation where we’re not getting the jobs, they’re taking the resources and all their profits and they are heading home.”

While the governor noted he didn’t have any evidence supporting this assertion, he announced he was considering investigating this “very serious” matter.

If this idea were true, it would be a serious problem; however, even a cursory review shows that oil and natural gas development is not only providing jobs for Ohioans, but also leading an economic renaissance in bringing billions of dollars into our economy that otherwise would not be invested here.

These benefits are being shared across the eastern region of our state. This year, more than 1,000 Jefferson County residents have gained full-time employment thanks, in large part, to Utica Shale development. The unemployment rate in Carroll County has plummeted from 16 percent in 2010 to 6.5 percent in October 2012. A similar experience in Columbiana County is taking place, with the unemployment rate dropping from 15.1 percent in 2010 to 7.3 percent today. Tuscarawas County has seen its unemployment rate drop from 13.1 percent in 2010 to 5.7 percent. These examples are just part of a much larger trend sweeping across a historically economically challenged region and are a direct result of the expanding development of our oil and natural gas resources in the Utica Shale.

At the same time this development is providing needed jobs for hard working Ohioans, it is also bringing significant investments to the Buckeye State. Recently, investments made by Chesapeake Energy, an Oklahoma-based company, brought in more than $1 billion for development of the Utica Shale in 2011; this is in addition to the more than $650 million it paid to Ohio landowners in the form of leasing and royalty payments. Chesapeake is not alone. British Petroleum provided more than $320 million to landowners in Trumbull County, and Hess has spent more than $1.3 billion to secure its leasing rights. These three companies alone have brought over $3.3 billion in new revenue to the Buckeye State this year.

In addition to providing needed jobs and increased investments, oil and natural gas development is also rejuvenating lost industries as well in manufacturing. Steel is once again flourishing in the Mahoning Valley and Northeastern Ohio. Timken and Republic Steel have announced massive expansions of their operations. V&M Star recently constructed a $650 million facility to make tubular steel products that will be used in oil and gas wells in our state and across the nation. In the past year, the company’s investment has increased to over $1.1 billion, with the Youngstown mill producing its first pipe just this past November. These investments are being made right here in Ohio, and are creating jobs and wealth that are benefiting Buckeyes of every political and socioeconomic stripe. And they would not exist if not for the demand of Ohio’s burgeoning oil and gas industry.

The governor knows all of this and has stated as much on multiple occasions. In his 2012 State of the State address, Kasich touted “We’re the number nine job creator in America. From 48 to nine in one year.” It cannot, then, be overlooked that over that time, investments made by companies developing the Utica Shale were one of the main driving forces behind that achievement. In fact, Utica Shale development has created more than 8,000 jobs in Ohio over the course of 2012. This is likely what led the governor to declare on Oct. 9 that “This whole industry [oil and natural] is about jobs.” Just because these jobs may not be in Columbus, doesn’t mean they aren’t improving the lives of Ohioans, and they certainly deserve the proper recognition.

In the end, the truth remains: The continued, unimpeded development of our natural, homegrown energy resources is a driving force in our state’s economic revitalization, one that will continue to lift not only the communities in eastern Ohio, but across the state as well.

James is the immediate past president of the Ohio Oil and Gas Association and current President of Artex Oil Company.

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