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    Ohio’s Natural Gas Resource and Impacts on the Economy

    Ohio’s oil and gas industry has experienced dramatic growth over the past ten years due to technological advances opening up exploration and development in eastern Ohio. How does this growing industry benefit Ohio’s economy, and will this growth continue? The U.S. Geological Survey recently increased its assessment of the amount of undiscovered, technically recoverable natural gas in the Marcellus and Utica Shale to around 214 trillion cubic feet or “tcf.”  This new assessment shows the capacity for growth in the industry should continue, as this is a significant increase from an assessment of approximately 122 tcf in 2011/2012. The IHS Markit further estimates that by 2040, the region will supply nearly half of all U.S. natural gas production.

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    How does this increasing supply of natural gas actually impact the Ohio economy? Ohio University Voinovich School of Leadership and Public Affairs conducted a research project examining the impact of shale development on businesses and communities in Ohio. According to the study, Ohio’s shale industry contributed $22.34 billion to the state’s economy in 2015. This included full- and part-time employment of 147,126, with $7.33 billion in wages and benefits. The Ohio University Study also found that for every job created in Ohio’s shale industry, an additional 0.71 jobs are created in the state.

    In addition to the obvious impact to the oil and gas industry itself, the top industries influenced by shale activity in Ohio are wholesale trade, limited-and full-service restaurants, hospitals and real estate firms. A trip through eastern Ohio shows significant economic activity, including new hotels and restaurants stimulating the local economies. The state tax base also benefits from the shale play, as the industry contributed almost $16 million, while employees contributed $6.6 million in 2015.

    Cleveland State University’s Maxine Goodman Levin College of Urban Affairs also conducted an independent analysis of the energy economy, which was released in March 2019. This study found shale-related investment in Ohio totaled approximately $74 billion from 2011 through June 2018. The increasing supply of low-cost natural gas leads to future petrochemical plants, plastics manufacturers, natural gas power plants and manufacturers. This further stimulates employment and service industries in the impacted communities.    

    Ohio consumers also see benefits. The Consumer Energy Alliance released a report titled “The Benefits of Ohio’s Natural Gas Production to Energy Consumers and Job Creators,” which shows Ohio consumers saved approximately $40 billion on energy costs from 2006 to 2016. The report found residential consumers saved approximately $15 billion and industrial consumers saved approximately $25 billion.

    With the significant increased assessment of how much natural gas is underlying Ohio and this region, the favorable impacts to Ohio’s economy should be expected to continue, especially with the growth of ancillary industries that feed off of the low cost natural gas.   

    This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

    Barnes & Thornburg LLP is a large, full-service law firm that seeks to take a more entrepreneurial and cost-effective approach both to client service and its own business.

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    Paul Garinger
    Paul Garinger
    Paul Garinger advises on complex commercial litigation and business torts before state and federal trial and appellate courts nationwide. Paul’s experience includes oil and gas, pipeline, general commercial, financial, and construction-related claims. Paul understands the business decisions related to resolving disputes, and dedicates his practice to realizing successful outcomes both in and out of the courtroom.
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