Ohio's Growing Shale Energy Industry Attracted $2.3 Billion in Direct Investment in the First Half of 2021, With Cumulative Investment Reaching $95.3 Billion
Total investments include upstream, midstream, and downstream investments from roads, drilling, royalties, gathering lines, and more sources, according to the Cleveland State University study
COLUMBUS, Ohio, June 7, 2022 /PRNewswire/ -- Total investment in Ohio's resource-rich shale energy sector was approximately $2.3 billion in the first half of 2021, according to a Cleveland State University (CSU) study. Prepared for JobsOhio, the latest report covers shale investment from January through June 2021 and cumulates total investment from 2011 forward. The study from CSU's Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs revealed that, with previous investments to date, cumulative oil and gas investment in Ohio through June 2021 is estimated to be $95.3 billion. Of this, $65.9 billion has been in upstream, $21.4 billion in midstream, and $8.0 billion in downstream industries.
The study showed that cumulative shale investment has steadily risen over time between 2016 and 2021, particularly with upstream investments. Overall upstream investments were up by about $361 million in the first half of 2021 compared to the second half of 2020, reflecting higher royalty earnings due to higher oil and gas prices. Indirect downstream investment, such as the development of new manufacturing due to lower energy costs, was not investigated as part of this study.
"Ohio has developed the natural gas, natural gas liquids, and petrochemical supply chain industries to bring important jobs to hard-working Ohioans," said JobsOhio President and CEO J.P. Nauseef. "We have an exceptional opportunity to grow these important industries and establish Ohio as a major international player in shale-related productivity."
"COVID, supply chain problems, and low gas prices presented significant challenges to the industry in the first half of 2021," said Andrew R. Thomas, Director of the Energy Policy Center in the Maxine Goodman Levin College of Urban Affairs of CSU. "Even so, total investment, including midstream and downstream, was only down 4% from the second half of 2020. We anticipate that our next reports will show a marked increase in total investment."
Upstream activities, such as drilling, roads, and royalties, accounted for nearly $2.2 billion of this total investment. As determined from Ohio Department of Natural Resources Division of Oil and Gas (ODNR) data for shale well drilling, 74 new wells were drilled during the first and second quarters of 2021, six fewer than the number drilled in the second half of 2020. Jefferson County had the highest number of new wells with 36, followed by Harrison and Monroe Counties, which had 13 and 10 new wells, respectively. Data also indicated that the total volume of gas-equivalent shale production in the first half of 2021 was 7% less than overall production in the second half of 2020.
The first half of 2021 saw a steep decline in midstream investment compared to the second half of 2020, with no major pipeline development or processing capacity expansion as the COVID pandemic unfolded. However, more recently, rising commodity prices approaching 10-year highs will likely put upward pressure on investment spending across all-natural gas segments. The midstream spending that did occur in the first half of 2021 included gathering system buildout for pipelines ($29.1 million) and compression ($13.8 million).
In downstream developments, two compressed natural gas refueling stations (representing a combined investment of $31.3 million) were installed by transit agencies in Cleveland and Columbus. Additional capacity expansion occurred at Marathon's oil refinery in Canton, totaling an estimated $15.8 million.
This is the eleventh CSU study reporting investment resulting from oil and gas development in Ohio related to the Utica and Point Pleasant formations. The latest report and previous reports can be found here. For more information on Ohio's growing energy industry, visit www.JobsOhio.com/energy.
JobsOhio is a private nonprofit economic development corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention, and expansion. The organization also works to seed talent production in its targeted industries and attract talent to Ohio through Find Your Ohio. JobsOhio works with six regional partners across Ohio: Dayton Development Coalition, Ohio Southeast, One Columbus, REDI Cincinnati, Regional Growth Partnership, and Team NEO. In 2022, JobsOhio was recognized as the National Nonprofit Organization of the Year. Learn more at www.jobsohio.com. Follow us on LinkedIn, Twitter, and Facebook.
The Maxine Goodman Levin College of Urban Affairs at Cleveland State University offers undergraduate, graduate, and doctoral degrees in fields that guide and advance vibrant and sustainable communities, including urban studies, public administration, urban planning, environmental studies, nonprofit management, and organizational leadership. Levin is recognized as one of the best public affairs schools in the nation according to U.S. News & World Report. Levin is ranked 3rd in the US in the specialty of Urban Planning and Policy, 7th in the specialty of Local Government Management, and maintains a strong standing in the specialty of Nonprofit Management.
Founded in 1964, Cleveland State University is a public research institution with nearly 16,000 students, 10 colleges and schools and more than 175 academic programs. CSU recently was ranked No. 1 in the nation for increases in research expenditures, according to the National Science Foundation and was again chosen for 2019 as one of America's best universities by U.S. News & World Report.
SOURCE JobsOhio
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