Connie Mellin
Natural Gas NOW
“PAShaleAdvocate”

A new report by the Cleveland State University shows natural gas production is surging in the Appalachian Shale region, with no end in sight.

Offshore oil and natural gas drilling has taken place in federal waters of the Gulf of Mexico for over 75 years. But drilling for oil in natural gas in the Gulf of Mexico is costly; just building a production platform can often cost over a billion dollars.

Cleveland-Cliffs Inc., hot-briquetted iron (HBI) production plant being built in Ohio

Then along came fracking in the Appalachian Shale region. It is definitely cheaper to drill on land then in the water. As a result, natural gas production has been declining in the Gulf of Mexico and rising in the Appalachian Shale region. This has companies moving and investing in the region.

An article published by The Repository in Canton, Ohio gives more information:

“We’re continuing to see that the center of gravity for natural gas is moving from the Gulf (of Mexico) coast to Appalachia.”

Investment in the energy-rich shale sector in eastern Ohio continues to grow, reaching $74 billion since 2011, according to a report commissioned by JobsOhio.

The quarterly report, done by Cleveland State University’s Energy Policy Center at the Maxine Goodman Levin College of Urban Affairs, shows that about two-thirds of that investment has been in drilling, land acquisition, building roads and other expenses tied to the “upstream” portion of oil and gas production.

The rest has been spent on activities such as collecting and gathering the oil and gas along with transmission lines and investments in natural-gas power plants and other uses.

“The landscape for American energy looks vastly different now than it did just five or 10 years ago, and that is largely due to the resources being unlocked in the Ohio Valley,” said Matt Cybulski, director of energy and chemicals at JobsOhio, in a statement.

The study represents investment through the first half of 2018. It comes just weeks after researchers at IHS Markit released estimates that show by 2040, the Utica and Marcellus shale regions in Ohio, West Virginia and Pennsylvania will supply 45% of U.S. natural gas production. That’s up from 31% this year.

Production of natural-gas liquids ethane, propane and butane is expected to double during this period, accounting for 19% of the nation’s total.

The latest data shows production from the region, which is primarily natural gas, continues to surge.

Oil production in the final three months of 2018 was 5.8 million barrels, a 38.6% increase from the same period in 2018, according to the most recent report from the Ohio Department of Natural Resources.

Gas production hit 663.5 million cubic feet, a 32 percent increase from the final three months of 2018.

The report shows 2,575 horizontal shale wells, with 2,241 reporting oil and gas production.

The Cleveland State report is based on investment data by companies working in the region.

In the first half of 2018, much of the investment was focused on Belmont, Monroe and Jefferson counties on the state’s eastern edge.

Meanwhile, additional investment is being made to further develop the region’s pipeline system to get resources to markets.

But what is attracting the attention of Andrew Thomas, the executive in residence at the Energy Policy Center, and research associate Mark Henning is how the resources will be used and whether it will be in the state.

A $700 million Cleveland-Cliffs iron-making plant set to open in Toledo next year is using natural gas to make hydrogen, they said. A similar $500 million project being developed in Ashtabula County in northeast Ohio by Petmin USA will do the same thing.

Meanwhile, the state continues to wait on whether Thai chemical company PTT Global Chemical and its South Korean partner, Daelim Industrial Co., will proceed with a giant proposed petrochemical plant in Belmont County that would depend on ethane.

“Creative uses are going to come out of this cheap natural gas we have in this in area,” Thomas said.

Their report does not track job totals tied to shale, and Thomas said it is something that needs to be done.

“We’re continuing to see that the center of gravity for natural gas is moving from the Gulf (of Mexico) coast to Appalachia,” he said.

This is great news for Ohio and the Appalachian Shale region!