American Oil and Gas Reporter - February 2020 - 81

Shale Plays Keep Paying Off For Ohio
COLUMBUS, OH.-Total investments
in Ohio's shale energy sector have hit
$77.7 billion since tracking began in
2011, a report from Cleveland State University calculates. It adds most of the
growth is attributable to Ohio's proximity
to the Utica and Marcellus shale formations
in the state's eastern counties. The play
has accounted for more than 85% of U.S.
shale gas production growth since 2011.
Prepared for JobsOhio, a private nonprofit designed to drive job creation and
new capital investment in Ohio, the study
says Ohio's shale-related investments-
including up-, mid- and downstream-for
the second half of 2018 was $3.82 billion.
The report's authors, from CSU's Energy
Policy Center at the Maxine Goodman
Levin College of Urban Affairs, say
drilling investments dipped slightly in
the second half of 2018, compared with
the first six months, but total upstream
investments were higher.
Upstream activities, such as drilling
and royalties, accounted for more than
$3.5 billion of the total, JobsOhio says.
According to the Ohio Department of
Natural Resources Division of Oil and
Gas, 117 wells were drilled during the
third and fourth quarters of 2018, 40%
fewer than in the first half of the year.
Nevertheless, it notes, longer laterals
boosted production totals and increased
investments in each well. Data indicates

that the volume of gas-equivalent shale
production in the second half of 2018
was 17.7% higher than in the first six
months, with total upstream spending in
the second half of the year exceeding the
first half by $173.4 million.
Ohio saw limited investments in midstream infrastructure, reaching $231.8
million in the second half of 2018. Those
monies mainly went to a gathering system
build-out, the study says, with the most
devoted to gathering lines, followed by
gathering system compression and dehydration facilities. According to the research,
no new gas fractionation was added during
this period, however several pipeline projects began during 2019.
New Construction
In the downstream sector, JobsOhio
says, two combined heat and power plants
with a total capacity of 22.5 megawatts
were installed in the state, representing
an estimated investment of $34.1 million.
No natural gas power plants broke ground
in the second half of 2018, but, the study
points out, more than $1.5 billion worth
of new construction starts occurred in
May 2019-the South Field Energy Facility
in Columbiana County, Oh., and the Long
Ridge Energy center in Monroe County,
Oh. The report adds additional downstream
investments in the third and fourth quarters
of 2018 include $3.8 million that is ded-

icated to compressed or liquefied natural
gas refueling stations.
"A pause in new major pipeline, processing and petrochemical project construction during the study period led to a
drop in midstream and downstream investments from the first half of 2018," JobsOhio
says. "An uptick in midstream and downstream investment is anticipated in the near
term, given the billions of dollars in projects
that either are in the late planning stages or
broke ground as of 2019."
Earlier in 2019, JobsOhio notes, IHS
Markit released projections that by 2040,
the Utica and Marcellus shale region, including Ohio, will supply nearly half of
all domestic natural gas production.
"As the upstream and midstream sectors
continue to mature, our focus is to land
more downstream investment," says Matt
Cybulski, director of energy and chemicals
at JobsOhio. "This strategy has two focal
points: helping companies already in
Ohio expand to take advantage of cheap
natural gas and natural gas liquids, and
attracting new green-field developments
such as ethane crackers, methanol plants
and other related investment."
Cybulski points out those downstream
projects often are very capital intensive,
lead to more construction jobs and create
high-quality, long-term permanent jobs.
He adds communities thrive when those
facilities open or expand.
❒

Study: Gas-Fired Power Saves Lives
SAN DIEGO-Replacing coal-fired
electric generation plants with natural
gas-fired units between 2005 and 2016
saved more than 26,500 lives and increased
local production of corn, soybeans and
wheat, a study from the University of
California, San Diego, calculates.
In "The Downstream Air Pollution Impacts of the Transition from Coal to
Natural Gas in the United States," published
in Nature Sustainability, Jennifer Burney
analyzes the effects of fuel switching on
observed aerosol and ozone changes, and
the subsequent impacts on human health,
crop yields and regional climate.
The study evaluates the effects of closing 334 coal-fired plants at 138 facilities
and their replacement by 612 gas-fired
generating units across 243 facilities. It
points out a small fraction of the changes
were direct upgrades, such as a new gasfired unit replacing an older one, but the
majority represent new capacity-either
new units added to existing facilities or

new facilities entirely.
Burney used data from the U.S. Environmental Protection Agency on electric
power generation, in combination with
satellite measurements of local pollution
to gauge the impacts of shutting down
coal-fired plants. The study also relied
on mortality rates and crop yield data
from the Centers for Disease Control and
U.S. Department of Agriculture.
In addition to the emissions-including
particulate matter and ozone-from burning
coal affecting humans and plants through
respiration, the study notes those emissions also alter local climate by blocking
sunlight.
According to the study, during those 11
years, coal plant operations were responsible
for more than 329,400 premature deaths
and the loss of 10.2 billion bushels of crops.
"The unique contribution of this study
is its scope and the ability to connect discrete technology changes-like an electric
power unit being shut down-to local

health, agriculture and regional climate
impacts," Burney says. "We hear a lot
about the overall greenhouse gas and
economic impacts of the transition the
United States has undergone in shifting
from coal toward natural gas, but the
smaller-scale decisions that make up this
larger trend have really important local
consequences. This analysis provides a
framework for communities to more thoroughly and accurately assess the costs
and benefits of local investments in energy
infrastructure."
The study doesn't consider emissions
caused by hydraulic fracturing, and Burney
predicts the impacts of fracturing and
flaring may lessen the positive aspects of
gas-fired generation.
Although there are considerable benefits to decommissioning older coal-fired
plants, she warns the newer units are not
entirely benign.
Policymakers see GHG emissions as
a separate problem from air pollution,
FEBRUARY 2020 81

American Oil and Gas Reporter - February 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2020