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Ohio.com
Ohio’s Utica
Shale investment grows 26 percent, now tops $28 billion
By Bob Downing
Beacon Journal staff writer
May 7, 2015
Ohio’s Utica Shale industry continues to grow, despite low commodity
prices, according to a new report by a Columbus-based law firm that has
been tracking the industry.
The investment in shale projects in eastern Ohio now tops $28 billion,
a 40 percent increase in total investments since last fall, says
Monday’s report from Bricker & Eckler LLP.
The report lists 148 projects, 15 new since last fall.
One of the local beneficiaries is Blair Rubber Co. in Medina County,
which makes rubber linings for storage vats and rail cars.
It added a 50,000-square-foot expansion at its Seville plant, partially
due to the increased use of rail by the fracking industry. The $5
million expansion doubled the facility’s size.
Matt Warnock, partner and co-chair of Bricker & Eckler’s oil and
gas industry group, said that despite recent fluctuations in oil
prices, the number of shale projects in Ohio continues to grow.
“Further — and somewhat surprising — we haven’t seen any significant
slowdown in the number of high-dollar projects. All of this bodes well
for Ohio, particularly the southeastern region of the state,” he said
in the company’s fourth Utica Shale economic report.
Attorney Aaron Bruggeman said that activity in the past six months has
shifted from exploration and production to “downstream infrastructure.”
“We continue to see an increase in the number of pipeline projects,
particularly interstate lines, gathering facilities, compressor
stations and related investment,” he said.
Utica Shale investment grew from $12.2 billion in October 2013, to
$16.8 billion in spring 2014 to $22.3 billion in fall 2014.
The report does not include projects with unknown values or one of the
biggest potential projects: an ethane cracker plant in Belmont County
with a multibillion-dollar price tag.
That project, which Gov. John Kasich announced April 22, is under study
by PTT Global Chemical of Thailand and Marubema Corp. of Japan. They
plan to spend about $150 million for engineering and permit work to
determine if the project will move forward.
If that happens, the facility would create several hundred permanent
jobs, several thousand construction jobs and a total investment of
several billion dollars, the Bricker & Eckler report says.
A potential site for the plant is in Shadyside at a FirstEnergy Corp.
power plant that largely is shuttered. The new plant would convert
liquid ethane from shale drilling into polyethylene, a key ingredient
to make plastics.
Three other ethane cracker plants have been proposed in Ohio, West
Virginia and western Pennsylvania.
Projects that have been killed or delayed include a $70 million
gas-processing plant by Blue Racer Midstream LLC in Mahoning County
(shelved in January) and a $100 million U.S. Steel/Republic Steel and
Lorain Tubular project to make steel casings for shale development
(plant idled in January).
The decline in drilling also triggered layoffs at Timken Steel’s three
mills in Stark County.
Also dead is a $1.5 billion Bluegrass Pipeline that was to move Utica
and Marcellus natural gas liquids to the Gulf Coast. Officials cited a
lack of interest from drillers.
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