Ohio’s Hydraulic Fracturing Industry – A Boon As Promised Or Something Less?

CLEVELAND, Ohio — A 2012 Cleveland State University report predicted that Ohio’s then-growing hydraulic fracturing industry would add 66,000 direct and indirect jobs and $5 billion annually to the state economy by the end of 2014.

The predictions only grew from there.

A decade later, with operations spread across the east of the state to take advantage of the economic potential of shale drilling, plenty of numbers are available. But they are blurry and tell different stories from different points of view. And like many things perceived as political, the successes and failures of the industry largely depend on who explains.

There are over 3,600 permits to operate such wells in Ohio. One estimate has linked more than 200,000 jobs to the industry, either directly or indirectly, although the state acknowledges the number is exaggerated. And Ohio ranks sixth in the nation for natural gas production and 13th for oil production. Yet environmental concerns remain.

For the people who live there, the industry has brought jobs and money.

“It’s a lifesaver for a lot of people who worked there,” said Jack Cera, a former state representative from Bellaire in eastern Ohio. “There was an influx into the economy that would never have happened.

But some opponents of the industry’s proliferation in Ohio and neighboring states said any job growth would likely be short-lived. Sean O’Leary, senior fellow at the environmental and public policy think tank at the Ohio River Valley Institute, said once drilling is complete, fewer workers are needed to extract gas and oil.

“And so, as the industry matures, it requires fewer and fewer employees,” O’Grady said.

This graph shows oil production in Ohio from 2010 to 2020.

rapid proliferation

Around the start of his first term as Governor. John Kasich and those working in the oil and gas industry have touted increased production along the eastern edge of the state to provide an economic boon to Ohio. It was a time when hydraulic fracturing operations – known as “fracking” – were rapidly proliferating to release natural gas trapped up to two miles underground in shale formations.

At the time, drilling was pushing into the Utica Shale formation. It had taken place in the Marcellus shale formation which sits 9,000 feet below the surface — 3,000 to 7,000 feet above Utica — but most of those oil and gas wells were in Pennsylvania. neighbor.

There has also been talk of using the site of a former coal-fired power plant in Belmont County to build a $6 billion refinery to make ethylene and other plastics from shale gas. , what is commonly called a “cracker”. Such an operation could create more than 7,000 construction jobs and around 700 permanent jobs. This refinery was never built.

Numbers

Ohio has 81 wells licensed for the Marcellus Shale and 3,591 licensed wells for the Utica Shale as of March 12. Most are listed as active and in production, according to the Ohio Department of Natural Resources.

There are also 226 active underground injection wells that companies use to store brine, the liquid waste produced after blasting underground shale with water, according to 2020 figures from the ODNR.

The wells produced 180.2 million barrels of oil and 12.5 billion cubic feet of gas from 2010 to 2020, according to the ODNR. The companies also injected at least 142.5 million barrels of brine.

During this period, the amount of the departure tax – 10 cents per barrel of oil and 2.5 cents per thousand cubic feet of natural gas – increased almost every year. In fiscal 2011, the state collected $11.6 million of this tax, which also includes payments for coal and other mining operations. Last year, that number was more than five times higher — at $63 million — with all but about $5 million coming from natural gas, according to the Ohio Department of Taxation.

Funders of such operations also like to brag that the industry directly and indirectly supports 208,000 jobs.

And a study by researchers at CSU’s Maxine Goodman Levin College of Urban Affairs, commissioned by the state’s economic development arm, JobsOhio, said industry directly and indirectly involving shale injected $90.6 billion in the economy between 2012 and the first half of 2020. The state, by comparison, had a total economy of $695 billion in 2020.

xxxxxxx

This graph shows natural gas production in Ohio from 2010 to 2020.

Grain of salt

But take some of the numbers backers push with a grain of salt, critics say. For example, the number of 208,000 jobs was taken from a 2019 Department of Employment and Family Services report. It counts every person that the US Census Bureau codes in its surveys are working in both the field of drilling and in the sectors that support it.

This includes, for example, truckers, who transport much more than hydraulic fracturing materials. So there are more workers in this number than those related to oil and gas.

Additionally, figures released by the same department from 2020 indicate that an average of 9,425 people worked in industries directly related to oil and gas that year, down 3,000 jobs from 2019.

He also said 173,616 worked in ancillary fields in 2020. But Department of Employment and Family Services spokesman Bill Teets wrote in an email that the state has no no way to tell how many of that number are unrelated to oil and gas.

The same goes for the distinction between oilfield workers and workers related to gas extraction, he wrote.

All of that is a long way of saying yes, there was an impact. Ohioans have jobs that didn’t exist before. But there is no solid number to put on it.

Mike Chadsey, spokesman for the Ohio Oil and Gas Association, which supports the industry, said there were plenty of benefits.

“In 10 years, the amount of investment, development and jobs has been staggering,” he said.

As the industry navigates another decade, these operations are unlikely to slow down anytime soon, especially with an increased focus on domestic oil production due to Russia’s military assault on Ukraine, he said.

But not everyone sees it that way. A February 2021 report from the Ohio River Valley Institute said that between 2008 and 2019, as natural gas production increased in 22 counties across three states, the benefits the industry would have proliferated in the region did not unfold. not produced.

In Ohio, seven major producing counties lost 8.4% of its jobs and 5.4% of its population, according to the report. Personal income rose 8.8%, but that tracked both the state and the United States, and the report raises the question of whether any jobs created were filled by Ohioans or those coming from other states.

“That’s not to say the industry hasn’t provided jobs,” said O’Leary, the report’s lead author. “I mean obviously there are oil and gas jobs being created. But at the same time, when you look at what the impact is on the economy as a whole, the answer is that very few people were hired and there were a lot more jobs lost.

Chadsey downplayed the significance of the report and noted that the institute’s executive director previously worked at the Pennsylvania chapter of the Sierra Club conservationists.

“No matter what the Oil and Gas Association says; the data says that’s not true,” Chadsey said.

“Almost everything lost”

Cera, who has represented Bellaire and surrounding communities in the Ohio House for 23 of the past 40 years, said he believes drilling in Belmont County has slowed in recent years, but operations are still in place. .

Trucks filling with brine are still driving on the roads, and he said residents were more worried about traffic and cracked asphalt than potential environmental hazards. But hotels have grown, and he said oil and gas operations provide economic opportunities in places where such prospects for coal mines and steel mills are dying out.

“We had no business here,” he said. “We lost almost everything.

But still, he felt the impact fell far short of what the boosters promised a decade ago, though much of it was tied to the talk of building a refinery.

“I’m not minimizing the economic benefit at all, it’s just that everyone was hoping the cracker factory would come in,” Cera said.

Check Also

to protect our planet, they must be exposed

This spring, I taught a new undergraduate course in environmental sociology. Most of my students …