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Long-term Natural Gas Dividends

Projections show the natural gas industry will flourish in the future, but it's going to take time a

Jacob Runnels | GateHouse Media Published: August 1, 2017 8:45 PM

According to a report from the American Petroleum Institute (API), projections to the year 2040 showed positive growth in the natural gas industry for America, especially Ohio.

In late June, the API released a national report showing that, by 2040, there will be up to 5.9 million jobs created through the natural gas industry, compared to 4.1 million natural gas industry jobs that existed in 2015. Among the three functions of natural gas — end use, infrastructure and production, API also predicts total wages in the sector that utilize the three functions will increase by 2040. It predicts going from a total $269 billion in 2015 to $397 billion in 2040.

Also in the report, it stated that, in Ohio, there were 188,500 jobs created within the natural gas industry, which represented 3.6 percent of all the jobs in Ohio. The report also states that the natural gas industry contributed $26.7 billion to Ohio’s economy in 2015.

“Projections are about the hopeful demand growth increasing, so there’s an outlet for our natural gas resources here in Ohio with our shale resources,” said API Ohio executive director Chris Zeigler. “From the information that came out in this report, it lines up with the information that we’ve seen over the years.”

He said the projections are based on the successes the natural gas industry has enjoyed since 2015. It also takes into account a relatively successful future for natural gas policies and practices, such as innovation.

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He said the study examined how much natural gas had been consumed among different sectors, whether they be residential, commercial use or through power plants. He said it took those factors into consideration when determining how many jobs could be created from it.

“Generally, it accounts for increase end use whether it’s for natural gas, power generation, or petrochemical industry or whatever it may be," Zeigler said. "[It also] utilizes resources we have domestically and accounting for that and putting a quantitative number to the number of jobs and economic impact it would have."

Zeigler said he’s looking out for the future of the natural gas industry through potential policies that could help or harm it. In particular, he said the API is looking at potential policies such as HB 178 and SB 128, which would address Ohio’s zero-emissions nuclear resource program.

“We’ve propped up on economic nuclear power generation at the expense of further investment in cleaner natural gas getting online,” he said. “[It would also] impact negatively the direct impact of further production of our Utica Shale resources.”

With predictions of gradual increase within the natural gas industry, Shawn Bennett, executive vice president for the Ohio Oil and Gas Industry (OOGA), said that this progress in the oil and gas industry has seen a rapid boom since 10 years ago.

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“When you think about the oil and gas industry, the research and development that takes place is extraordinary,” he said. “What we’ve discovered again is the Utica shale development does work in the state of Ohio. We’re utilizing the development we’re doing in 2016 and prior to that, and each well, as a data point.”

Bennett said the natural gas industry in Ohio is still discovering what it can do with natural gas and, given some more time, the industry will only advance technologically and through its practices. He said, when it comes to the technology, Ohio can eventually overcome difficulties,  such as parts of shale developments with unsavory drilling conditions, like shallow depths and lack of pressure to extract gas.

As prospects of improving the trade grow, Bennett said it does take time for things such as technological and economic factors to catch up.

“It’s not going to be an overnight discovery,” he said. “It’s about pushing the boundaries of what’s economical.”

He said factors pertaining to what Ohio does outside of the state matter as well. He said it’s “imperative” that the natural gas industry in Ohio should focus on how to “attract large scale end-use” manufacturers in America to the areas around the Appalachian Basin. He said this would help utilize Ohio’s natural gas and create more jobs.

“We do have an infrastructure bottleneck when it comes to building pipelines,” he said. “In the Appalachian Basin, without efficient takeaway capacity, our producers are getting a significantly lower price for their commodity, natural gas, than their competitors from other states, such as Texas or Oklahoma. Until we relieve that bottleneck by putting in more pipelines, we will be selling our natural gas at a lower price.”

With Ohio’s natural gas producers identifying the problems they face and tackling them accordingly, Bennett said the state’s technology, policies and practices can catch up to meet the numbers in the API’s report. With each well they create, he said producers are always getting better at improving their wells and techniques. With improved technology, he has hopes of expanding the Ohio natural gas producers’ ability to extract the resource. 


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