WELLSVILLE, OHIO – A torrent of investment in mineral leases, manufacturing plants, pipeline constructiion, and drilling platforms signals what business executives and state energy officials say is the most significant surge in oil and gas development in Ohio in decades.
But the development of the Marcellus and Utica shales, two hydrocarbon-rich rock layers that lie beneath much of eastern Ohio, also is producing fresh public concerns about the consequences to public safety and the state’s waters from disposing of millions of barrels of contaminated oilfield wastewater.
On Friday, the Ohio Department of Natural Resources (ODNR) imposed tough new wastewater disposal regulations on the operators of the state’s 176 deep injection wastewater disposal wells. The new rules, prompted by earthquakes last year that were centered around a year-old injection well in Youngstown, will make Ohio’s Class II deep injection wells among the most stringently monitored and regulated in the nation.
The other features of the new taxonomy of energy development, which span the promise of big job growth and the peril of inadequate oversight, are on display in and around this Ohio River Valley town of 3,800. Plans to build a $US 6 billion coal-to-liquid-fuels plant on a bluff above Wellsville were modified last fall in favor of a $US 3 billon gas-to-liquids (GTL) plant that would use natural gas to create 50,000 barrels (2.1 million gallons) of diesel and naphtha fuel each day. The switch is breathing new life into the project, which has struggled for four years to secure funding.
Total SA, France’s largest oil company, announced just after the start of the year that it had paid $US 2.32 billion to Chesapeake Energy Corp. and EnerVest for 250,500 hectares (619,000 acres) of mineral rights in northeastern Ohio. Natural gas companies are offering landowners in Wellsville and surrounding communities up to $US 5,800 an acre for mineral leases.
Royal Dutch Shell also is scanning the Ohio River Valley for a site to build a multi-billion dollar plant to convert natural gas to ethylene. “We are now assessing various possible longer-term options to use domestically abundant natural gas in new ways, extending its application beyond current industrial and residential uses and as a fuel to make electricity, including a natural-gas-to-liquids facility in the U.S.,” Kayla Macke, media relations coordinator at Shell Oil, wrote in a statement to Circle of Blue.
Chesapeake Energy, by far the largest investor in the Utica and Marcellus shale development in Ohio, announced in November that its production would anchor a 1,980-kilometer (1,230-mile) pipeline from Pennsylvania, West Virginia, and northeastern Ohio to the Gulf Coast. The pipeline would have an initial capacity of 125,000 barrels per day of ethane, the company said in a news release.
The state’s steel industry also is reviving to produce pipes and equipment for oil and gas production, and transport. More than 400 workers in Youngstown are constructing a $US 650 million steel mill for Vallourec & Mannesmann Holdings, Inc. to produce half a million tons annually of seamless steel well tubing used in drilling and in developing natural gas wells. U.S. Steel spent $US 100 million to expand and upgrade its tubular steel mill in Lorain, Ohio, and Timken Company is spending $US 250 million on a similar project at its Canton mill in northeastern Ohio.
Evidence of the rapidly improving mood of this part of the Ohio River Valley is emerging daily. Hotels and motels are full. Winding down one of the country roads outside Wellsville reveals a shiny new Camaro in the driveway of a farmhouse — the only bright spot on a wet winter day.
“That Marcellus shale that’s coming around here, that’s making a lot of people around here instant millionaires,” said Rick Williams, a lifelong Wellsville resident who serves as the town’s zoning commissioner. “People are so glad to see this. I mean, we need something, that’s for sure, and between the Marcellus shale and this gas plant, I think the two will go good together.”
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– Keith Schneider, Codi Yeager