CNN Money: Youngstown, OH: America's Next Boom Town?

http://money.cnn.com/video/news/2012/01/16/n_ohio_boomtown.cnnmoney/

How do they do that?  Oil companies owned by the sovereign wealth funds of China and the House of Saud finance the drilling.  Profits from selling our hydrocarbon resources leave the state.  Speaker Boehner and Governor Kasich give these "Job Creators" an extra tax break just on principle.

 

I don't know that China and the House of Saud are financing the gas field developments, but I do have the expectation that the profits will flow to Wall Street and elsewhere. 

How do they do that?  Oil companies owned by the sovereign wealth funds of China and the House of Saud finance the drilling.  Profits from selling our hydrocarbon resources leave the state.  Speaker Boehner and Governor Kasich give these "Job Creators" an extra tax break just on principle.

 

I don't know that China and the House of Saud are financing the gas field developments, but I do have the expectation that the profits will flow to Wall Street and elsewhere.

 

I see this "profits leaving the state" meme a lot.  It is economically and financially illiterate.

 

First, whose profits are we talking about?  Let's take Chesapeake Energy, for example, one of the anti-fracking troglodytes' favorite punching bags.  It removes the profits from the state, one thinks?  And yet, its shareholders are all over the place--including in Ohio.  If you want some of those profits to come back here, just buy yourself a little bit of CHK, and suddenly, some of the profits are not just coming back to Ohio, they're coming back to you personally.  (Be careful before you do that.  CHK's share price is down almost 25% over the past 12 months.)

 

What about others' profits?  For example, the subcontractors and suppliers to the gas industry that have been mentioned in some of the previous articles mentioned in this thread (and in the mainstream media in Northeast Ohio and beyond)?  Their profits don't show up as Chesapeake's profits--after all, money they got from Chesapeake was money that never made it to Chesapeake's bottom line.  Those companies have their own bottom lines and their own profits that may well be staying in the state (because they're more likely to be local), and their employees are more likely to be predominantly Ohio citizens as well.  Even if not, the odds are that they do business with local Ohio companies, and the same phenomenon applies.

 

Then look the other direction in the stream of commerce.  What about Chesapeake's customers?  What if companies like AEP and FirstEnergy buy the gas from Chesapeake for their own operations?  (Of course, those companies may well sell electricity generated from gas out-of-state, just like other states' companies might sell their own products and services to Ohio residents.  That's the advantage of a free trade area, which we at least have nationwide, as well as internationally with many countries as well.)

 

Lots of different people will get pieces of this pie.  We can of course try to get as much as possible for Ohio companies (and American companies more generally), but if foreign companies are willing to help invest in developing the resources, of course they're going to be entitled to part of the pie.  That's how economic development works.

How do they do that?  Oil companies owned by the sovereign wealth funds of China and the House of Saud finance the drilling.  Profits from selling our hydrocarbon resources leave the state.  Speaker Boehner and Governor Kasich give these "Job Creators" an extra tax break just on principle.

 

I don't know that China and the House of Saud are financing the gas field developments, but I do have the expectation that the profits will flow to Wall Street and elsewhere.

 

I see this "profits leaving the state" meme a lot.  It is economically and financially illiterate.

 

First, whose profits are we talking about?  Let's take Chesapeake Energy, for example, one of the anti-fracking troglodytes' ...

I got that far, Mr. Flamebait

He's got a point, though.  The exploration efforts are going to demand incredible financial means, which Chesapeake has.  No Ohio company is going to go at this on spec.  Regardless, the real potential here for Ohio is the spin-off.  Timken can't fill the demands for steel fast enough.  A-M here in Cleveland is trying to fire up its Flats plant.  There will be processing plants built.  The workers who actually do the exploration will pay Ohio taxes.  I see very high reward.  I just wish we knew more about the risk.

If the risk is earthquakes, that's obviously a serious problem.  Even the staunchest libertarian doesn't argue that you have the right to use your property in ways that directly damage others'.  (I'm assuming earthquakes above a certain intensity, of course.  A 2.0 earthquake could have been shaking my office building for the last week straight and I'd never be any the wiser.)

 

If there is a measurable chance of causing an 8.0 or something, though, then we should shut the wells down immediately.

 

If the risk is contaminated drinking water aquifers, that's a risk that can be mitigated by appropriate regulation.  (One of the posters on this subject over at CU has a geology background, I believe, and has some great in-depth posts about the varying levels of geological separation between gas and water in various parts of the state.  As it turns out, shallow, run-of-the-mill wells often seem to pose bigger risks to water supplies than deep wells, even ones with horizontal drilling via fracking once you've gotten down deep enough.)

 

If the "risk" is in practice just a principled objection to using any fossil fuels at all, that objection is going nowhere in this state.  Not in the Youngstown area especially.

He's got a point, though.  The exploration efforts are going to demand incredible financial means, which Chesapeake has.

 

Not even Chesapeake has the financial means, so that's why it joined with French energy giant Total (pronounced toe-tall) in a $2.3 billion venture....

http://www.cleveland.com/business/index.ssf/2012/01/chesapeake_energy_starts_joint.html

 

And all the drilling and new natural gas supplies on the market has caused wholesale prices to fall to ridiculously low levels near $3/MCF. That is making it even more difficult for Chesapeake et al to afford capitalizing more projects. There's 5,000+ well permits in the 16 Ohio counties of the Utica Shale region and a very, very small number have been acted upon thus far.

Ohioans want a Bridge Fuel, but don’t want ODNR to drive us over a Bridge to Nowhere

 

Hydrofracking in Ohio has become, if not a household term, then at the least a salient issue for Ohioans.  Recently, Quinnipiac University released a survey indicating that 7 out of 10 Ohioans believe that hydro-fracking (deep shale gas drilling) should be stopped until studies of its effects are completed.

...

http://ohioenvirolawcenter.wordpress.com/2012/01/21/poll-ohioans-want-to-take-it-slow-and-get-it-right-with-shale/

 

New York requires an environmental impact statement before drilling.  Ohio does not.  New York has a consciousness of protecting the water supply for New York City that originates in the Adirondack Mountains. 

Some facts, figures on shale boom

February 12, 2012

Tribune Chronicle | TribToday.com

 

Beginning today, the Tribune Chronicle is publishing a series of stories on how the shale boom is impacting Carroll County, less than 40 miles south of Trumbull County. The stories are designed to give people here a glimpse at what might be in our future, and to help them prepare.

 

There are those who say the play in the Marcellus and Utica shales is about to bust. Natural gas prices are down, stockpiles are up and a mild winter has made the situation worse for companies in the natural gas industry. Companies can no longer sell gas at a price that recoups the cost of drilling for it.

 

As Samuel Langhorne Clemens once said about his own death, reports of the shale play's bust are greatly exaggerated.

 

Here are some important facts and figures to chew on:

 

READ MORE AT:

http://www.tribune-chronicle.com/page/content.detail/id/567819/Some-facts--figures-on-shale-boom.html?nav=5007

Chesapeake CEO: More Utica Wells, 200 Miles of Pipeline

Thursday, February 23, 2012

By Dan O'Brien

 

YOUNGSTOWN, Ohio – Chesapeake Energy Corp. said it plans to more than double its oil and wet gas production by 2015, creating more opportunity in unconventional shale plays such as the liquids-rich Utica shale in eastern Ohio.

 

Chesapeake CEO Aubrey McClendon said in a conference call Wednesday that shale formations such as Eagle Ford in east Texas and Utica, which runs deep underneath portions of the Mahoning Valley, present some of the best opportunities for growth in the industry and for the company.

 

McClendon said that Chesapeake is on course to boost its liquids gas production by more than 70% this year, or 63,000 barrels per day. At this rate, the CEO said that the company is on track to rank among the top five producers of liquids in the United States by 2015.

 

READ MORE AT:

http://businessjournaldaily.com/drilling-down/chesapeake-ceo-more-utica-wells-200-miles-pipeline-2012-2-23

Full disclosure, I work in this industry so I'm all for it.  I research title history at the courthouse in Lisbon, which is packed with researchers every day.  Most of the downtown parking lots are "commercial mineral parking only" which I have to admit is a nice perk.  It's a boom of historic proportions.  Tiny county seats are getting swamped with people.  The Vindicator just did a story about rising sales tax revenues and it hasn't even really started yet.  The lawyers are just the beginning, next comes the actual work.  They aren't building those mills in Youngstown for nothing.  Someone has to put together all the pipe that comes out, and build the rigs, and drive the trucks.  YSU and Stark State have training programs but a lot of these workers will be coming in from elsewhere, by necessity.                       

Full Disclosure, Part II: I'm also doing some work for this industry, researching areas in which I have expertise (I'm sure you can guess what track I'm on). There's stuff coming soon that many may not believe -- collector/distributor pipelines,  transmission pipelines, transload facilities, rail lines, water treatment plants, cracker plants, plastics plants, refineries, etc. etc. This is going to be a 10-year spurt of growth activity before it settles into distribution, maintenance, servicing and operations-type activities. That part may last for decades, depending on the price of gas, consumption rates, and public policies addressing the energy industry.

Hopefully we'll be able to drink our water still!

Hopefully we'll be able to drink our water still!

 

I've already heard stories from my home county of Columbiana about wells and such.  Channel 21 here in Youngstown has had a really good series of stories of both good and bad of the shale boom.  They went to Williston, ND to talk about what their boom is doing in the middle part of the country.  What I find interesting that they are having problems with, Youngstown/Warren should not, and that's infrastructure.  We already have the infrastructure in place, and that really should be a good sign to companies looking to build and setup shop here.  Another series they went to some Pennsylvania towns where peoples' wells have been contaminated by the fracking chemicals.  Anyway, it was a really good series, and it basically touches base with everything we already know, but the benefits and drawbacks of this new boom here in the Mahoning Valley.

 

 

Hopefully we'll be able to drink our water still!

 

Hopefully we'll be able to drink our water, and not from a still!

 

Seriously, there does need to be more regulation on the use of chemicals and to not leave the water in the fractures. It needs to be returned to the surface and treated, not just for purposes of clean water but to stop lubricating small fault lines.

 

 

We already have the infrastructure in place, and that really should be a good sign to companies looking to build and setup shop here.  Another series they went to some Pennsylvania towns where peoples' wells have been contaminated by the fracking chemicals.  Anyway, it was a really good series, and it basically touches base with everything we already know, but the benefits and drawbacks of this new boom here in the Mahoning Valley.

 

We certainly have more infrastructure than the Dakotas, but not enough. That's especially true when it comes to rail, which is why I'm involved. Without better rail linkages, more heavy sand, water, pipe and chemicals is going to be transported by truck which is less safe and more damaging to pavement and bridges. Governments own, finance and maintain roads and bridges, and can't afford to do it as well as they used to due to declining gas tax revenues. Railroads, on the other hand, are mostly privately owned, financed and maintained. They can't always afford to add infrastructure, but they can maintain it once it is built.

 

Did you know you cannot get a train directly from the port and industries of Cleveland to the Youngstown/Warren area? Instead they have to go up to Ashtabula or south to Alliance to get there. And the big Class I RRs like NS and CSX aren't interested in these short-distance, lighter-density moves of a train a day going just 50-100 miles. But the shortline and regional railroads like Cleveland Commercial RR or Wheeling & Lake Erie are interested, yet the rail infrastructure doesn't exist for them. There were once three high-quality rail lines that linked Cleveland and the Mahoning Valley. Not anymore. Restoring one of them could cost as little as $10 million.

 

Or, that you can't get a train directly between Youngstown/Warren and the Ohio River port of Wellsville or the proposed nat-gas cracker plant at/near Wheeling? Instead you have to the train into Pennsylvania and make a back-up move at busy Conway Yard. The missing piece is a track connection at Alliance, costing maybe $5 million.

 

Or, that you can't get a train from the port of Ashtabula to some manufacturing districts that otherwise have rail in the Youngstown/Warren area? Track connections need to be restored in Trumbull County and near Greenville, PA.

 

Or, that you can't get a shipment moved by shortline or regional railroad between Youngstown/Warren and Pittsburgh, PA? The big Class I's probably aren't going to make that move because it's too short and probably too light-density for them. A shortline or regional railroad would likely move stuff that distance, but they are missing about 15 miles of rail infrastructure between New Castle, PA and Youngstown. The Pittsburgh & Lake Erie made those kinds of shipments up until 1993 when CSX bought them out. Now that we need P&LE to serve a resurgent industry, they are gone like many other pieces of industrial infrastructure lost since Black Monday, Sept. 19, 1977.

There are going to be exceptions to the rule, as we've seen in VERY ISOLATED cases throughout Pennsylvania... The vast majority, I would say at least 96-98% of people won't see any change with their water, but naturally a select few will face some problems.

 

Remember the Penn State study found no significant relation between water pollution and fracking. If a few are affected, I am sure there will be things in place to provide them with clean water, etc.

 

I am excited for the future of the Mahoning Valley. Sure the naysayers sight the low price of natural gas, but many feel to acknowledge the RICH WET GASSES in the Utica Shale. Remember the Utica is much more plentiful and diverse when compared with the Marcellus.

 

Exciting times ahead!

I am excited for the future of the Mahoning Valley. Sure the naysayers sight the low price of natural gas, but many feel to acknowledge the RICH WET GASSES in the Utica Shale. Remember the Utica is much more plentiful and diverse when compared with the Marcellus.

 

 

True about the wet gasses, which the Utica shale in Ohio has but the Marcellus in PA, NY and WV does not. As long as it is not overproduced, it will continue to be more profitable than the "dry" gas we're more familiar with.

I'm still very concerned with out-of-state interests controlling this process.  I understand that for now that's the way it has to be, but hopefully at some point in the nearer future there are Ohio companies running the show and keeping more of that money in state.

 

Also, looking at the map, this shale seems to be quite large and covering almost a dozen states.  Why is eastern Ohio the "epicenter," so to speak?

Also, looking at the map, this shale seems to be quite large and covering almost a dozen states.  Why is eastern Ohio the "epicenter," so to speak?

 

Eastern Ohio is the epicenter of the Utica shale, not so much the Marcellus although there are Marcellus shale formations under Ohio but they are much deeper. And that's why much of the timing of viability of fracking different areas has to do with the depth of the shale formations to be tapped. Those that are closer to the surface will be tapped first.

I am excited for the future of the Mahoning Valley. Sure the naysayers sight the low price of natural gas, but many feel to acknowledge the RICH WET GASSES in the Utica Shale. Remember the Utica is much more plentiful and diverse when compared with the Marcellus.

 

 

True about the wet gasses, which the Utica shale in Ohio has but the Marcellus in PA, NY and WV does not. As long as it is not overproduced, it will continue to be more profitable than the "dry" gas we're more familiar with.

 

By "wet gasses", do you mean oil?  I have heard that Ohio's shale is more valuable because it holds oil.

By "wet gasses", do you mean oil?  I have heard that Ohio's shale is more valuable because it holds oil.

 

No. "Wet" natural gas has less methane and more significant heavy hydrocarbons like ethane, propane, butane and pentane and other liquid hydrocarbons that can be liquefied. The extraction of wet natural gas requires that it be separated or "cracked" into the different hydrocarbon, hence the need for cracker plants. Some of these plants can be quite large and require investments in the billions. Then if the split-out gases cannot be transported to or accommodated at existing refineries (such as in Texas and Louisiana), the new spin-off refineries are possible at/near the cracker plant(s). The cracker plants also can turn ethane into ethylene. That means the possibility of plastics plants as more than half of the world's ethylene is used to make polyethylene, the world's most widely used plastic. So you will probably see some new plastics plants popping up in the region in the next few years.

Cross-posted from the Canton-Massillon developments thread....

 

Baker Huges to hire 700 people in Massillon, invest $64 million to serve shale gas industry

Published: Monday, February 27, 2012, 10:00 PM

  By Robert Schoenberger, The Plain Dealer

 

CLEVELAND, Ohio -- Baker Hughes, one of the nation's leading oilfield services companies, plans to build a 700-job regional headquarters in Massillon.

 

The Massillon office would serve as the company's base for providing services to shale gas exploration companies in Ohio, Pennsylvania and surrounding states.

 

The Ohio Tax Credit Authority on Monday approved a 65 percent tax credit for the $64 million project. The state also approved several other Northeast Ohio business expansions at its regular monthly meeting. Calls to Baker were not immediately returned late Monday, but the company has been hinting at plans to build in this area for some time.

 

READ MORE AT:

http://www.cleveland.com/shalegas/index.ssf/2012/02/baker_huges_to_hire_700_people.html

Construction broke ground today in Youngstown on a $13 million dollar facility that will create 100 new jobs.

 

http://www.vindy.com/news/2012/feb/27/breaking-news-houston-based-company-bringing-13m-f/

More news from Canton/Massillon area.  As good as it is that they are expanding, this sounds like terrible news for downtown Canton.

 

http://www.cleveland.com/business/index.ssf/2012/02/timken_to_expand_office_by_akr.html

In the oil biz, there are a lot of Texas people living in Northeast Ohio hotels right now so they can work. 

In the oil biz, there are a lot of Texas people living in Northeast Ohio hotels right now so they can work. 

 

This is annoying.  We need to find a way to make them move here and keep that money in our state if they're going to be extracting resources under our land.

^ That's a little extreme.  Oil work, as is farming, is a migratory field.  Workers go where the work is.  They are living in Ohio.  Buying in Ohio. Paying sales tax, rent, hotel costs, etc. in Ohio.  There is no need to force them to live here permanently just because they are extracting resources from "our land."

^ Agreed, jeremyck01--but (as Clevelander17 has already suggested) why aren't OHIO companies (based in Cleveland or Youngstown) in charge of these operations (and not those in Texas)?  Yes, I realize  both my naivete and lack of business acumen (among other things) are at play here--but why, exactly, are Texans traversing OHIO's shale-oil fields?

Same reason chicago is running our mart, i guess. Or perhaps they have unique resources and talents their ohio counterparts (if they even exist) can't match?

^ That's a little extreme.  Oil work, as is farming, is a migratory field.  Workers go where the work is.  They are living in Ohio.  Buying in Ohio. Paying sales tax, rent, hotel costs, etc. in Ohio.  There is no need to force them to live here permanently just because they are extracting resources from "our land."

 

But at the end of the day, a certain chunk (probably a decent chunk) of the revenues generated by this "boom" is going back to Texas.  Why are all of these energy companies located in Texas to begin with?  What I really want to see is the companies relocate their headquarters here and have their management take up residence.  I know this is somewhat parochial, but I do feel like we're being taken advantage of a bit.

^ i agree. when out of state companies like walmart, ford, etc are taking the sweat of your brow so to speak thats one thing, but when they are taking the actual natural resources out from under or making their money off it that seems more distasteful. that goes for big agriculture too.

1400 Shale Related Jobs Created in Youngstown Already!

http://www.vindy.com/news/2012/mar/08/shale-boom-gives-rise-1400-plus-new-jobs-valley/?fracking

NiSource to build new gas transmission line and feeder lines through the heart of Ohio's Utica Shale counties

Published: Friday, March 02, 2012, 6:00 AM

  By John Funk, The Plain Dealer

 

The scope of Ohio's shale gas boom is beginning to take shape.

 

NiSource Midstream Services is planning to build a major 90-mile transmission pipeline, through six eastern Ohio counties thought to be rich in oil as well as natural gas.

 

The pipeline will send gas and oil to a new processing plant capable of handling 200 million cubic feet of gas a day.

 

It will run in an existing NiSource right-of-way from Columbiana County south to Monroe County, passing through Carroll, Jefferson, Harrison and Belmont counties.

 

READ MORE AT:

http://www.cleveland.com/business/index.ssf/2012/03/nisource_to_build_new_gas_tran.html

This is going to be a HUGE project -- a billion dollars in total -- that will also probably require reactivation of the Cadiz Branch rail line.......

 

Cadiz to sell 207 acres to company for $1 million

By Ruth Ann Nabb

TimesReporter.com correspondent

Posted Mar 05, 2012 @ 11:17 PM

 

CADIZ —

Village Council has approved an option to sell 207 acres in the Harrison County Industrial Park to MarkWest Energy for $1 million.

 

The Harrison complex will include 200 million cubic feet per day of cryogenic processing capacity and is expected to begin initial operations in mid-2013, officials said.

 

Additionally, the Harrison fractionation facilities, which will be able to market natural gas liquids by truck, rail and pipeline, will be connected to MarkWest’s processing and natural gas liquids pipeline network in Pennsylvania and West Virginia and will provide for the integrated operation of the two largest fractionation complexes in the Northeast, officials said.

 

READ MORE AT:

http://www.timesreporter.com/communities/x570350543/Cadiz-to-sell-207-acres-to-company-for-1-million

^ Agreed, jeremyck01--but (as Clevelander17 has already suggested) why aren't OHIO companies (based in Cleveland or Youngstown) in charge of these operations (and not those in Texas)?  Yes, I realize  both my naivete and lack of business acumen (among other things) are at play here--but why, exactly, are Texans traversing OHIO's shale-oil fields?

 

Because there aren't any companies in Cleveland or Youngstown who can do this work. Increasingly, there are regional and/or field offices being opened in eastern Ohio. But the headquarters remain in Texas and Oklahoma where the first oilfield engineering firms were established a century ago. And they are staying there because there is still drilling occurring there, including for the Bartlett and Barnett shale plays which may be as big as the Marcellus/Utica.

 

Each crew of drilling workers doesn't live here (or anywhere, it seems) since they stay in one spot only long enough to drill a well and then move on to the next one. That next well could be in Ohio, Pennsylvania, West Virginia, North Dakota, Oklahoma or Texas. Their employers may have offices here, but their headquarters are almost always in the traditional oilfields of Texas and Oklahoma. Yes, I'm aware that Pennsylvania was America's first and largest oilfield for a while, but that was eclipsed by Texas, Oklahoma and California by the 1920s.

^ Thanks for the update, KJP.  Needless to say, while I'm delighted for the Youngstown region and Ohio in general, I'm hoping to see most of the earnings remain in Ohio, if they can.  No one is belittling the hard-working men from Texas or Oklahoma who bring their expertise here for profit, yet the image of "the carpetbaggers" lurks in the background.  Just say it ain't so.

Unfortunately I do know what is happening to their money, but some of it is being spent here for hotels, food, entertainment, etc. And then there is all of the manufactured good and shipped materials that go into a well. And then there's the really low-cost energy supplies that are made available from here.

Looks like they're doing something to address the earthquake problem.

 

Ohio: Rules Tightened for Wells

State officials on Friday instituted stricter rules for oil and gas industry disposal wells like one that scientists have linked to minor earthquakes in Youngstown. The rules, contained in a report by the Ohio Department of Natural Resources, will require a well owner to conduct and analyze geophysical tests on a new well before disposal begins and will prohibit drilling into deep Precambrian rocks that are more likely to contain seismic faults. The report found a “compelling argument” that the quakes in Youngstown since last March were induced by the disposal of waste liquids from the drilling process called hydraulic fracturing. The state will require the installation of pressure monitoring systems at all wells and electronic record-keeping by trucking firms that bring the waste liquids to the wells.

They also are requiring that all of the brine needs to be stored in tanks, so there aren't going to be containment ponds. The leaking/spilling over  ponds are the major source of the groundwater contamination related to fracking wells, not from leaking wells.

I was just thinking about a month ago if someone would ever require something like that. It's a great idea, surprised no one's mandated it before.

 

Now, to extend the economic development theme on that, some company's gonna make tons of money and build a factory somewhere in the area building brine storage tanks. :D With the millions of gallons of fluid they use to frac these things, and the thousands of wells which are going to be drilled, that's a lot of storage tanks!

^ Agreed, jeremyck01--but (as Clevelander17 has already suggested) why aren't OHIO companies (based in Cleveland or Youngstown) in charge of these operations (and not those in Texas)?  Yes, I realize  both my naivete and lack of business acumen (among other things) are at play here--but why, exactly, are Texans traversing OHIO's shale-oil fields?

Because there are very few oil/gas companies and oil service companies based in Ohio, and the ones that are based in Ohio tend to be very small. Texas and Oklahoma (with a secondary nod to California) are where all the big oil and gas companies are based, so naturally they're the ones who are going to exploit the fields found in other states.

 

North Dakota doesn't have any oil/gas companies based in their state, yet that fact has hardly hurt their economy. You can see from the articles already posted here that many of these Texas and Oklahoma companies are *already* setting up branch offices in Ohio, so once they get started up and some more native Ohioans will become trained in the industry, it will be as much run by Ohioans as by Texans.

Cadiz last week (see above), Columbiana County this week. The location noted below is about 10 miles south of Alliance...

 

$900M plant in Columbiana County expected to employ hundreds

Published: Wed, March 14, 2012 @ 12:10 a.m.

 

Columbiana County project expected to employ hundreds

 

By Karl Henkel

[email protected]

 

HANOVERTON

 

A trio of energy companies plan to build a $900 million natural-gas processing plant in eastern Ohio.

 

The project includes a gas-separating facility near Hanoverton in Columbiana County and a centralized complex in nearby Harrison County.

 

The project, which will be rolled out during the next five years, is expected to employ hundreds of Ohioans, Oklahoma-City based Chesapeake Energy Corp. said Tuesday.

 

READ MORE AT:

http://www.vindy.com/news/2012/mar/14/plans-call-for-m-plant/

This is a "let's take a deep breath" article.....

 

Midstream Processors Stake Huge Claims in Eastern Ohio

Wednesday, March 14, 2012

By Dan O'Brien

 

CADIZ, Ohio – First, it was MarkWest Energy Partners LP's meet-and-greet session noon Tuesday at its new regional office here, as this community in Harrison County welcomed with open arms a company that plans to deliver nearly $1 billion worth of investment in sophisticated natural gas-processing operations and hundreds of new jobs.

 

Then, five hours later, it was Chesapeake Energy Corp.'s turn, as that industry giant announced it would invest, with its project partners, $900 million to build what it described as the largest integrated natural-gas processing operation in eastern Ohio (READ STORY POSTED TUESDAY).

 

By day's end, it was clear: Midstream operators have arrived in the red-hot Utica shale, signaling a new phase in the development of this region's oil and natural gas industry.

 

READ MORE AT:

http://businessjournaldaily.com/drilling-down/midstream-processors-stake-huge-claims-eastern-ohio-2012-3-14

This isn't just about Marcellus/Utica, but it focuses on that simply because that's where the national attention has been lately.

 

The Truth About Fracking

From the Feb. 20, 2012 issue of National Review

By Kevin D. Williamson

 

In the middle-of-frackin’-nowhere Pennsylvania, Boy Genius is showing off his giant robot: It’s about 150 feet tall, God and the almighty engineers alone know how many hundreds of tons of steel, and four big, flat duck feet on bright orange legs. “Yeah, this is kind of cool,” he says of his supersized Erector Set project. “You can set those feet at 45 degrees, and it will walk around in circles all day,” a colleague adds.

 

But Boy Genius is not letting himself get too excited about all this — it’s pretty clearly not his first giant robot, and he’s a lot more excited about his seismic-imaging system: “It’s kind of like a GPS, but it’s underground and it works with the Earth’s magnetic characteristics.” Nods all around — that is cool. Everybody here has a three-day beard and a hardhat and steel-toed work boots, but there’s a strong whiff of chess club and Science Olympiad in the air, young men who are no strangers to the pocket protector, who in adolescence discovered an unusual facility for fluid dynamics and now are beavering away at mind-clutchingly complex technical problems, one of which is how to get a 150-foot-tall tower of machinery from A to B without taking it apart and trucking it (solution: add feet).

 

It's a long article that covers a lot of territory, and isn't just blindly pro-fracking, as one might expect from NR.

 

Colorado’s gas regulator took the unusual step of releasing a public debunking of Gasland’s claim that fracking is responsible for that flaming faucet. Confronted with the facts — call them “an inconvenient truth” — Fox responded that they were “not relevant.” But what is not relevant is that image of a burning water faucet, at least if you want to understand the facts about fracking, which the anti-frack fanatics don’t.

 

The problem with fracking mostly isn’t what goes down the pipe, but what comes up, and the real hairy environmental challenge turns out to be the relatively un-sexy matter of wastewater management. Gas drillers put their bits down through a lot of ancient seabeds, meaning that the water comes up saturated with our tasty friend NaCl, a.k.a. salt. Given that a great many examples of aquatic and riparian flora and fauna are evolved to do well in fresh water but curl up and die in salt water — especially salt water that’s considerably saltier than the saltiest seawater — you can’t just dump that stuff in the Susquehanna River. And then there’s potassium salts and such. And then there’s other stuff that comes up, too, substances you’d just as soon see remain buried in the depths of the earth: arsenic, for one thing, and the darkly whispered-about entity known in drilling circles as NORM — Naturally Occurring Radioactive Material — and various other kinds of Very Bad Stuff. Of particular concern is the presence of bromides, which, when combined with the chlorine used in water-treatment facilities, have a worrisome tendency to turn into the SEAL Team Six of volatile organic compounds, basically a big flashing neon sign reading “Cancer.”

 

There are other workaday environmental problems endemic to fracking: For the three to five days a frack lasts, it’s loud — really, really loud, because it’s basically a construction site, with a vast array of pumps and compressors and giant margarita mixers blending sand into the water, and a big battery of generators to run it all. There’s not much to be done about the noise, though you’re typically not fracking real close to densely populated areas. A few firms have hit upon the novel approach of simply offering nearby homeowners money to go away for the week, expenses paid, or at least putting them up in a hotel for the duration. (An idled fracking rig might cost you $1 million a week — you can afford to pay a lot of HoJo bills to keep that from happening.) The trucks cause traffic snarls, so they’re building more pipelines to replace the trucks, but digging pipelines can be an inconvenience, too. Fracking for gas is not zero-impact. There’s no easy way around that.

 

He also touches on some of the spinoff industries that have grown up around the core fracking operations, including at least one company that is doubly helpful because it is able to recycle used fracking fluids into water that can be used again:

 

A couple of hundred miles away from Boy Genius and his giant robot, in the Marcellus heartland of Williamsport, Pa., is TerrAqua Resource Management, one of the many private firms that have sprung up throughout The Play to do what the local wastewater-treatment plants and municipal authorities aren’t equipped to do and probably shouldn’t be expected to do: treat nasty drilling water so that it can be used again. Trucks pull up, unload their murky liquid cargo, and then fill up on usable water to take back to the next job. Inside, a trio of vast water tanks, chemical vats, some sand filters, and a bunch more engineers make that water reusable. The facility has been up and running for only a couple of years, but millions of gallons of water already have passed through it. The solids get filtered out and disposed of, bacteria get biocided, and everybody makes the department of environmental protection happy by providing a government-certified “beneficial reuse” of drilling water.

 

Interesting thing: The place doesn’t stink. It’s got a slightly earthy smell to it, like the nursery section at Home Depot, but it doesn’t smell like you’d expect a water-treatment plant to smell.

 

A good read all around.

 

http://www.nationalreview.com/articles/293086/truth-about-fracking-kevin-d-williamson

^ Agreed, jeremyck01--but (as Clevelander17 has already suggested) why aren't OHIO companies (based in Cleveland or Youngstown) in charge of these operations (and not those in Texas)?  Yes, I realize  both my naivete and lack of business acumen (among other things) are at play here--but why, exactly, are Texans traversing OHIO's shale-oil fields?

Because there are very few oil/gas companies and oil service companies based in Ohio, and the ones that are based in Ohio tend to be very small. Texas and Oklahoma (with a secondary nod to California) are where all the big oil and gas companies are based, so naturally they're the ones who are going to exploit the fields found in other states.

 

North Dakota doesn't have any oil/gas companies based in their state, yet that fact has hardly hurt their economy. You can see from the articles already posted here that many of these Texas and Oklahoma companies are *already* setting up branch offices in Ohio, so once they get started up and some more native Ohioans will become trained in the industry, it will be as much run by Ohioans as by Texans.

 

I work for a Texas company that has hired dozens of locals thus far, and these are all high-end professional jobs.  They throw money around in a way this area hasn't seen for a long while.  There are also a bunch of Texas guys who came up, but trust me, those guys all want to go home as soon as they can.  They say our women have too many tattoos.

The Republican Governor and the Republican House are not on the same page when it comes to taxing natural gas drilling in Ohio.  Kasich proposed raising taxes on the natural gas drillers - and then using the proceeds for an income tax cut for Ohio residents.  GOP House leadership thought otherwise and pulled the plan from their budget hearings.  In the understatement of the year from the article, "Kasich said he suspected that special interests for the oil and gas industry had gotten to lawmakers."

 

---

Kasich blasts GOP for pulling tax cut

Republicans in House reject plan on oil, gas drilling

By Joe Hallett, The Columbus Dispatch

Saturday, March 17, 2012 - 6:02 AM

 

Gov. John Kasich late yesterday lashed out at fellow Republicans controlling the Ohio House after learning they plan to strip out the tax provisions of his revamped state budget.  Apparently blindsided by the move, Kasich said he was “extremely disappointed” that lawmakers appear poised to favor the oil and gas industries over the residents and small businesses of Ohio.  Kasich said his proposal to impose extraction taxes on natural gas and oil and to use the proceeds to give Ohioans an income-tax cut are “very sensible” and it would be a “missed opportunity” for lawmakers not to enact his plan.

 

Kasich made his comments in a conference call with reporters.  Earlier, state Rep. Ron Amstutz, R-Wooster, chairman of the House Finance and Appropriations Committee, announced that the tax provisions of the mid-biennium budget review Kasich unveiled on Wednesday would be stripped out of a bill to overhaul the state budget.  On Wednesday, Kasich rolled out a sweeping plan — to be codified in a midcourse rewrite of the current two-year budget — to use higher taxes on oil and gas revenue from Ohio’s shale bonanza to provide an across-the-board income-tax cut for residents.

 

MORE: http://www.dispatch.com/content/stories/local/2012/03/17/kasich-blasts-gop-for-pulling-tax-cut.html

 

Those companies need to be taxed.  It's what texas does and helps the state have lower taxes on residents. If anyone (Republican or otherwise) think that a tax will discourage drilling, they need only look to states like Texas that have been doing this for decades.

Shell Chemical Selects Beaver County, Pa. for Cracker Plant

Thursday, March 15, 2012

 

YOUNGSTOWN, Ohio -- Shell Chemical LP, a subsidiary of Royal Dutch Shell, announced today that it has signed a land option agreement to evaluate a site near Monaca, Pa., for construction of its $3.2 billion petrochemical plant. The site straddles Potter and Center Townships in Beaver County, Pa., and lies on the banks of the Ohio River. The chemical complex would manufacture plastic from the natural gases extracted from well sites in the Marcellus shale play.

 

In a statement released to news organizations, Shell emphasized the project remains in its earliest phases.

 

....Shell has previously estimated the cracker plant would create several hundred permanent jobs at the facility, and as many as 10,000 construction jobs. According to the Pittsburgh Post-Gazette, in 2010 Shell paid $4.7 billion to acquire the drilling rights for 650,000 acres in the Marcellus shale play.

 

Pa. Gov. Tom Corbett described Shell's decision as "the single biggest industrial project in the state's southwest in a generation."

 

READ MORE AT:

http://businessjournaldaily.com/economic-development/shell-chemical-selects-beaver-county-pa-cracker-plant-2012-3-15

Residents, officials temper cracker plant excitement with realism

By Bill Vidonic, PITTSBURGH TRIBUNE-REVIEW

Sunday, March 18, 2012

 

Shawn Young bounded out of his home across from the soon-to-be-shuttered Horsehead Corp. zinc plant in Potter and shouted to a neighbor, "We got the Shell plant!"

 

"At least jobs will stay close by," said neighbor Grant Cochran, 48, a mechanical repairman at the plant for 19 years.

 

It's been more than a generation since anyone in Beaver County can recall hollering good economic news on the level of last week's announcement by Shell Oil Co. that it chose the zinc plant property as the potential location of a multibillion-dollar chemical plant along the Ohio River.

 

Read more:

http://www.pittsburghlive.com/x/pittsburghtrib/news/regional/s_787071.html#ixzz1pUwgFQZJ

Plumbers, Pipefitters, Companies Seek Shale Jobs

Friday, March 16, 2012

By Andrea Wood

 

BOARDMAN, Ohio – The plumbers and pipefitters who work out of  Local 396 union hall here want the “first opportunity” to put their skills to work in the Utica shale play.  To  underscore why job opportunities should come to them first, ther leadership invited oil and gas contractors and fabricators to bear witness.

 

“Our goal is to get a better understanding of what our needs are and to work together getting local jobs, local work, putting ourselves forward for this industry,” said Butch Taylor, who organized a luncheon and discussion Thursday at the union hall. Taylor is business manager for Local 396 of the Plumbers and Pipefitters union. Representatives from about a dozen companies working –- or seeking work –- in the shale industry attended the event, along with U.S. Rep. Bill Johnson, R-6 Ohio, who said his role is to “help make the connections.”

 

READ MORE AT:

http://businessjournaldaily.com/drilling-down/plumbers-pipefitters-companies-seek-shale-jobs-2012-3-16

Regarding Kaisich's tax proposal, isn't that basically what Alaska does? And isn't that why when oil boomed the first time the residents were actually getting checks from the proceeds? I am basing this off of memory of the 2008 election, so I might be wrong. And believe me I know that there is no way Ohio residents could ever directly get checks based on our huge overall population and expenses vs Alaska.