As we begin 2017, we are looking forward to a celebration of the Ohio Oil and Gas Association’s 70-year anniversary. Established in 1947, the Ohio Oil and Gas Association (OOGA) has taken great pride in protecting and promoting the common interests of those engaged in all aspects of the Ohio crude oil and natural gas producing industry. The OOGA hopes to carry on this mission and defend America’s greatest industry for at least 70 more years to come.
Speaking of supporting our industry, 2017 has also ushered in a change in the White House and, in turn, federal policy. While it still remains to be seen what will actually be accomplished on the regulatory front under the Trump administration, he is a welcome relief from the onslaught of regulations that were heaped upon the industry over the past eight years. He has been vocal about wanting to unlock America’s energy potential. President Trump has made clear his administration seeks energy independence for the U.S. and will help revitalize the oil and gas industry. It is refreshing to see this ideology from a new president who has allies in Congress who share this goal and are hard at work using the Congressional Review Act to take steps to repeal a number of onerous regulations.
In Ohio and across the Appalachian Basin, we have become victims of our own success. There is an abundance of natural gas with no apparent outlet. Thankfully there are numerous projects on the horizon that will alleviate some of the glut. The Ohio Environmental Protection Agency has issued wastewater permits for the PPT Global’s proposed ethane cracker plant being considered in Belmont County. The plant has not been officially announced, but the issuance of the wastewater treatment permit is another positive sign that Ohio may actually have a cracker built within our borders. Ohio’s oil and gas industry is looking for markets for the products we produce and it would be an economic win for the entire state, and even the Appalachian Basin, if we can maximize downstream products that can be manufactured from ethane.
On the transmission and distribution side of the equation, the state is waiting on pipeline projects to get the green light from the federal government. Once the remaining projects are authorized that will greatly help move our gas to more favorable markets. The pair of interstate natural gas pipeline projects stretching across Ohio, Pennsylvania, West Virginia and Kentucky were authorized for construction and operation by FERC in mid-January. Kinder Morgan began construction on its 215-mile Utopia Pipeline the first week of February. The Rover Pipeline has received FERC approval (and not a moment too soon). The pipeline was granted approval the evening before the FERC Commissioner’s last day, as the FERC entered a stretch where they will not have a quorum to operate until a new Commissioner is appointed. Approval for the Nexus Pipeline is still currently pending.
Another outlet for our gas is to create additional electric generation plants right here in Ohio. There are ten natural gas fired power plants currently in development. Many of the proposed plants are in Eastern Ohio, and if they all are built, will require about 9,800 megawatts capacity. Lordstown recently approved a second multi-million dollar energy plant to the Trumbull Energy Center in Northeast Ohio.
The industry had additional cause for celebration in 2016 when the U.S. Bureau of Land Management allowed for leasing in the federally owned portions of the Wayne National Forest. A second lease sale will be held in March for another 1,186 acres and could yield an additional $2 million in revenue. The first sale conducted in December included 719 acres, generating approximately $1.7 million in revenue for taxpayers.
Those of you working in the industry for any length of time have weathered storms in the past. As we enter the first few months of 2017, it is with relief that we put the past few years firmly in our rearview mirror to end what has been a difficult regulatory and economic road and we look forward to the opportunities of the next year.