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Panel: Economy to blast off with shale

July 1, 2012
By LARRY RINGLER - Special to the Salem News , Salem News

BOARDMAN - Drilling, construction, servicing and other value-added business linked to the coming natural gas shale drilling boom is projected to multiply nearly 30 times from 2011 to 2014.

The number of workers to drill wells, install transmission pipes and maintain roads or bridges is expected to surge by nearly the same percentage, with huge increases in labor income, along with local and state taxes.

But businesses planning to get a piece of what is seen as eastern Ohio's greatest economic boost since coal mining and steelmaking first need to get trained and certified, a group of speakers said Wednesday.

"If businesses have the ability and desire to expand into the shale play, they need to make the right connections and abide by regulations and standards," Linda Woggon, executive director of the Ohio Shale Coalition, said before speaking at the Regional Chamber's first Shale Supply Chain Seminar at Mr. Anthony's in Boardman.

The seminar kicked off what the shale coalition intends to be a series of such events in Ohio to inform local leaders about getting involved in natural gas shale exploration and processing.

A prime message was the need to get certified by the American Petroleum Institute, or API, and International Organization for Standardization, or ISO, in order to be considered for lucrative contracts.

Fact Box

Study results

Following are findings of a Utica Shale economic impact study done for the Ohio Shale Coalition by Cleveland State University, Ohio State University and Marietta College:

Value added economic impact:

2011: $162.03 million

2014: $4.858 billion

Employment:

2011: 2,275

2014: 65,680

Labor income:

2011: $99.76 million

2014: $3.299 billion

Output:

2011: $291.57 million

2014: $9.642 billion

Total state / local taxes:

2011: $16.52 million

2014: $433.530 million

Average labor income:

2011: $43,850

2014: $50,225

"Companies that make and service pipe, pumps, valves, cementing have to put in quality management systems, like ISO documentation," said Ed Durante, president and chief executive officer of Houston based Texas International Engineering Consultants. "They need the ability to come up with designs, validate them and go through audits."

He noted some companies overreact and put in quality and management systems that become too complicated.

"They need efficient programs," he said.

Xavier Tison, business unit manager for drilling service company FMC Technologies near Pittsburgh, said his company is looking to hire 30 to 50 direct employees who have business management skills, as well as training in hydraulics and mechanics.

He said he'd like to hire locally, noting, "It's hard to take someone from Texas and make them live where it snows."

A study done by Cleveland State University, Ohio State University and Marietta College found that workers in the Utica Shale, which includes much of eastern Ohio, will rise from 2,275 in 2011 to 65,680 in 2014.

Average labor income will increase to $50,225 from $43,850. Total state and local taxes will rise from $16.52 million to $433.53 million.

Jobs will be created not only in the drilling fields but in construction of natural gas processing plants, road and bridge work, legal services and the retail sector.

 
 

 

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