In September 2011, Kleinhenz & Associates completed an independent Economic Impact Study on the potential economic impact of the Utica Shale formation in Ohio. Because of the substantial economic opportunity to Ohio’s economy, there is a considerable amount of attention being paid to the geological and economic potential of the Utica Shale. Below is a summary of some of the facts included in the study:
- Ohio’s natural gas and crude oil industry could reinvest up to $14 billion on new exploration by 2015.
- Over the next five years, oil and gas producers are projected to spend over $34 billion in exploration and development, midstream, royalty and lease expenditures.
- Ohio’s natural gas and crude oil industry could generate approximately $12.3 billion to the gross state product and have a statewide output or sales of $23 billion.
- Ohio’s natural gas and crude oil operators could distribute more than $1.6 billion in royalty payments to local landowners, schools, businesses and communities based on an estimate of 2,837 new Utica wells drilled and completed between 2011 and 2015. This could exceed the total amount of royalties paid for all geological formations between 2000 and 2010.
- Between 2011 and 2015, Ohio’s natural gas and crude oil industry will help create and support more than 204,520 jobs from leasing, royalties, exploration, drilling, production and pipeline construction activities for the Utica Shale in Ohio.
- The industry wages are projected to grow to more than $12 billion in annual salaries and personal income to Ohioans by 2015.
The current economic benefits of the natural gas and crude oil industry include:
- Approximately $238 million reinvested on new exploration and development in Ohio.
- Generated approximately $988 million in gross state product and had a statewide output or sales of $1.7 billion last year.
- $90 million in royalty payments distributed to local landowners, schools, businesses and communities, as well as providing an additional $61 million in free natural gas to those mineral interest owners with wells on their properties.
- $32.7 million per year paid in federal, state and local taxes.
- Supports more than 4,490 direct jobs which contributes to a total of 12,950 Ohio jobs.
- $793 million in annual salaries and personal income to Ohio residents in 2010.
- $718 million kept in the state by buying locally-produced natural gas and crude oil.
- Ohio consumers saved $30 million in avoided interstate pipeline transportation costs, and another $9.2 million due to the price reducing impact that Ohio’s natural gas supply has on U.S. market.
Source: Ohio Oil & Gas Energy Education Program