Shale-related project list tops $12B in Ohio – ‘just the tip of the iceberg’

Source: Columbus Business First

A new report on economic development in Ohio’s shale gas region lists projects valued at more than $12 billion, and there’s more on the way, says Bricker & Eckler LLP attorney Matt Warnock with the law firm’s shale tax force.

“It’s just the tip of the iceberg,” he told me when we talked about the numbers he recently presented at a Bricker & Eckler energy update in Columbus.

That’s partly the case, Warnock said, because of the high demand for the few natural gas processing facilities coming on line in the Utica shale play, and expected increases in the number of wells drilled and put into production.

For example, he said MarkWest Energy Partners LP’s plant in Cadiz was running at capacity as soon as it was completed earlier this year. So it won’t surprise Warnock if such so-called midstream companies expand the processing facilities they have under construction or on the drawing board.

There are 84 projects on Bricker’s eight-page list. They include oil and gas projects such as MarkWest’s $1.5 billion investment in processing facilities and ones in other industries, including the $1 billion steel pipe mill V&M Star built in Trumbull County, and an $800 million natural-gas fueled power plant planned in Carroll County by Advance Power Services Inc.

The law firm was not able to track down dollar amounts for some of the projects on the list, so the total is higher than the $12.2 billion I added up. It also does not include lease and royalty payments to landowners who have cut deals with the oil and gas companies drilling in the Utica play.

Warnock said the ripple effect of all the investments in the Utica play is having a major effect on the economy in eastern Ohio.

“It starts with construction and everything that brings,” he told me, pointing to heightened demand for hotels and housing and increases in business for restaurants and bars.

Some landowners have walked into “a lot of wealth and are doing a lot of different things with that money,” Warnock said. That includes buying cars, trucks and farm equipment, paying off debts and supporting charities.

“There’s really an interesting dynamic in eastern Ohio right now,” he said.