Ohio’s fracking industry – boon as promised or something less?

CLEVELAND, Ohio — A Cleveland State University report in 2012 predicted that Ohio’s then-growing fracking industry would add 66,000 direct and indirect jobs and $5 billion a year to the state’s economy by the end of 2014.

Predictions only grew from there.

A decade later with operations spread out across the eastern side of the state to cash in on shale drilling’s economic potential, many numbers are in. But they are fuzzy and tell different stories from different viewpoints. And like many things perceived political, the industry’s successes and failures depend largely on who is doing the explaining.

There are more than 3,600 permits to operate such wells in Ohio. One estimate tied more than 200,000 jobs to the industry, directly or indirectly, though the state acknowledges that count is exaggerated. And Ohio ranks sixth in the country for natural gas production and 13th for oil production. Yet environmental concerns remain.

For people who live there, the industry did bring jobs and money.

“It’s a lifesaver for a lot of people who worked there,” said Jack Cera, a former state representative from Bellaire in eastern Ohio. “There was an influx into the economy that would have never happened.

But some opponents of the industry’s proliferation in Ohio and surrounding states have said any job growth would likely be short-lived. Sean O’Leary, a senior researcher at the environmental and public policy think tank Ohio River Valley Institute, said that after drilling is completed, it takes fewer workers to extract gas and oil.

“And so as the industry gets more mature, it requires fewer and fewer employees,” O’Grady said.

Rapid proliferation

Around the beginning of his first term, then-Gov. John Kasich and those who work in the oil and gas industry touted increased production along the eastern edge of the state to provide an economic boon for Ohio. It was a time where hydraulic fracturing operations – known as “fracking” – were proliferating quickly to release natural gas trapped up to two miles underground in shale formations.

At the time, drilling was pushing into the Utica shale formation. It had taken place in the Marcellus shale formation that sits as deep as 9,000 feet under the surface – 3,000 to 7,000 feet above Utica – but most of those oil and gas wells were in neighboring Pennsylvania.

There was also talk of using a site of a former coal-powered electrical plant in Belmont County to build a $6 billion refinery to make ethylene and other plastics from shale gas, something commonly known as a “cracker.” Such an operation could create upwards of 7,000 construction jobs and about 700 permanent jobs. That refinery has never been built.

The numbers

Ohio has 81 wells permitted for the Marcellus shale and 3,591 permits for the Utica shale as of March 12. Most are listed as active and producing, according to the Ohio Department of Natural Resources.

There are also 226 active underground injection wells that companies use to store brine, the liquid waste produced after blasting underground shale with water, according to 2020 numbers from ODNR.

Wells produced 180.2 million barrels of oil and 12.5 billion thousand cubic feet of gas from 2010 to 2020, according to ODNR. Companies also injected at least 142.5 million barrels of brine.

During that time, the amount of severance tax – 10 cents per barrel of oil and 2.5 cents per thousand cubic feet of natural gas – grew nearly every year. In fiscal year 2011, the state collected $11.6 million from that tax, which also includes payments for coal and other mining operations. Last year, that number was more than five times higher – at $63 million – with all but about $5 million coming from natural gas, according to the Ohio Department of Taxation.

Backers of such operations also like to boast that the industry directly and indirectly supports 208,000 jobs.

And a study by researchers at CSU’s Maxine Goodman Levin College of Urban Affairs, done at the behest of the state’s economic development arm JobsOhio – said the industry directly and indirectly involving shale pumped $90.6 billion into the economy between 2012 and the first half of 2020. The state, by comparison, had a $695 billion total economy in 2020.

Grain of salt

But take some of the numbers that backers push with a grain of salt, say detractors. For example, the 208,000 jobs number was pulled out of a Department of Jobs and Family Services report from 2019. It counts every person the U.S. Census Bureau codes in its surveys as working both in the drilling field and the sectors supporting it.

That includes, say, truck drivers, who haul a lot more than fracking materials. So there are more workers in that number than just those tied to oil and gas.

In addition, numbers released by the same department from 2020 say that an average of 9,425 people worked in industries directly related to oil and gas that year, down by 3,000 jobs from 2019.

It also said 173,616 worked in the ancillary fields in 2020. But Jobs and Family Services Department spokesman Bill Teets wrote in an email that the state does not have a way to say how many from that number are unrelated to oil and gas.

The same goes for differentiating between oilfield workers and workers related to gas extraction, he wrote.

All of this is a long way of saying that yeah, there was an impact. Ohioans have jobs that did not previously exist. But there is not a solid number to put on it.

Mike Chadsey, spokesman for the industry-backing Ohio Oil and Gas Association, still said there were a lot of benefits.

“In 10 years, the amount of investment and development and jobs has been staggering,” he said.

As the industry winds its way through another decade, such operations are not likely to slow down soon, especially with an increased focus on domestic oil production due to Russia’s military assault on Ukraine, he said.

But not everyone sees it that way. A February 2021 report by the Ohio River Valley Institute said that between 2008 and 2019, while production of natural gas ramped up in 22 counties in three states, the benefits the industry said would proliferate in the region did not come.

In Ohio, seven major producing counties lost 8.4% of its jobs and 5.4% of its population, according to the report. Personal income did increase 8.8%, but that trailed both the state and the U.S., and the report raises the question as to whether any created jobs were taken by Ohioans or those coming in from other states.

“That’s not to say that the industry didn’t provide some jobs,” said O’Leary, the main author of the report. “I mean, obviously, there are oil and gas jobs created. But at the same time, when you look at what is the impact on the economy as a whole, the answer is there were very few people that were hired, and there were a lot more jobs being lost.”

Chadsey downplayed the report and noted that the institute’s executive director previously worked at the Pennsylvania chapter of environmental advocates Sierra Club.

“It doesn’t matter what the Oil and Gas Association says; the data says that’s not true,” Chadsey said.

‘Lost nearly everything’

Cera, who represented Bellaire and surrounding communities in the Ohio House for 23 of the past 40 years, said he felt drilling in Belmont County had slowed in recent years but that the operations are still in place.

Trucks filling brine still drive down the roads, and he said residents are more worried about traffic and cracked asphalt than any potential environmental hazards. But hotels went up, and he said the oil and gas operations provided economic opportunities in places where such coalmining and steel mill prospects were dying off.

“We had nothing going on down here,” he said. “We lost nearly everything.”

But still, he felt the impact was far from what the boosters promised a decade ago, though a lot of that was tied to the talk of a refinery being built.

“I don’t downplay the economic benefit at all, it’s just everybody was hoping the cracker plant would go in,” Cera said.