• Ohio Becoming a Leader among Producers of Natural of Gas
  • October 11, 2017 | Author: Jeffrey R. Huntsberger
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • Over a period of just five years, Ohio has become one of the nation’s most significant producers of natural gas. Statistics released by the Ohio Department of Natural Resources for the second quarter of this year disclose that Ohio is producing natural gas at the amazing rate of 4.3 billion cubic feet per day. That is a 17 percent jump over the same period last year, even in the face of low natural gas prices in the $3 per mcf range, and limited access via pipelines to more lucrative markets elsewhere in the United States. Five counties – Belmont, Harrison, Monroe, Carroll and Jefferson – account for nearly 90 percent of the production.

    A September 10 article from Jude Clemente, a Forbes contributor, highlights opportunities for Ohio to expand its production even further. He points to the Rover pipeline that will transport shale gas from Ohio and other parts of the Appalachian basin to customers in the Midwest, Eastern Canada and even the Gulf Coast. With a larger market and better prices for their gas, Ohio exploration and production companies should have an incentive to produce more natural gas. The same holds true for the Nexus pipeline, which has now received FERC approval. These two pipelines and others will create new transportation pipeline capacity equal to 13 billion cubic feet per day.

    A second driver for Ohio gas production, according to Clemente, is the need in Ohio for additional gas-fired power plants. Natural gas has proven to be more cost competitive than aging coal plants that struggle to meet environmental requirements. There are currently nine gas-fired plants in Ohio; that number could double in the future. The result will be significantly lower carbon dioxide and other greenhouse emissions in Ohio.

    Perhaps most interesting, and profitable for the state, is the opportunity for Ohio and the rest of the Appalachian basin to build a multi-billion dollar petrochemical industry using the ethane gas that is present in large quantities in Ohio’s Utica shale. Such an industry would entail producing plastics, paint, and a wide variety of chemicals and other materials for manufacturing a variety of products. The infrastructure is already beginning to develop, although much of it remains in the planning stage. If it comes to fruition, it will provide a substantial number of jobs and significant sources of revenue for the state.