Ohio natural gas boom brings growth, risk

Ohio is part of a natural gas boom that could make the U.S. an “energy superpower,” with an abundance of low-cost fuel for homes, businesses and vehicles that also contributes to jobs and economic growth, industry experts said.

But environmental groups have raised concerns about the controversial drilling process used to extract the resource from natural gas-rich shale rock beneath three-quarters of the state.

Horizontal well drilling and hydraulic fracturing, or “fracking,” have dramatically altered the outlook for U.S. natural gas over the past five years, according to the American Gas Association, a Washington D.C-based trade group. Thirty-three states are now producing shale gas, with domestic production accounting for 93 percent of natural gas consumed in the U.S.

Once considered to be in danger of depletion, the U.S. natural gas resource base is believed to be sufficient to last 100 years at current consumption rates, the AGA said. Costs have fallen, and the price is expected to grow very slowly over the next 20 years, remaining below that of other fuels.

Average bill amounts for Vectren Energy Delivery customers in southwest Ohio have dropped 35 percent since the winter of 2008-09 because of lower natural gas prices, company officials said.

“Even with very aggressive demand growth, we can expect to see low and stable natural gas prices for decades to come,” said Kathryn Clay, the American Gas Association’s vice president of policy strategy.

In Ohio, oil and gas exploration is centered on the Marcellus and Utica shale rock formations that underlie the eastern half of the state.

The most recent data available shows Ohio had 397 horizontal shale wells operating during the fourth quarter of last year, 352 of which reported production results, according to ODNR. The other 45 wells were waiting on pipeline infrastructure.

The 352 wells produced a total of 1.4 million barrels of oil and 43.1 million Mcf (1,000 cubic feet) of natural gas during the fourth quarter. Oil production increased by 8 percent and natural gas production increased by 28 percent compared to the third quarter, according to ODNR.

Ohio Environmental Council spokesman Jack Shaner said there are “a lot of positives to the shale gas discovery,” but the priority remains the public’s health and safety, and air and water quality. The Columbus-based environmental advocacy group has proposed a sweeping upgrade to Ohio oil and gas laws to better protect state residents from the risks of horizontal, hydraulic fracturing.

In March, the former owner of a Youngstown-based waste water company pleaded guilty to dumping thousands of gallons of fracking waste water into a northeast Ohio storm sewer that empties into the Mahoning River watershed.

In April, the Ohio Department of Natural Resources announced new, stronger permit conditions for drilling near faults or areas of past seismic activity. The new policies were in response to a series of small earthquakes in Poland Twp. in Mahoning County that showed “a probable connection to hydraulic fracturing near a previously unknown microfault.”

The Ohio Environmental Council favors natural gas vehicles and combined heat-and-power systems. “Those are worthy uses of (natural) gas, and we should take advantage of those,” Shaner said. “But we also need to continually be monitoring and improving industry practices and strengthening the laws to make sure we are protecting the air we breathe, the water we drink and the land we play on.”

Growth opportunities related to natural gas include cleaner electricity generation, natural gas vehicles and combined heat-and-power systems for industry, experts said.

According to Vectren, the direct use of natural gas in America’s homes and businesses achieves 92 percent energy efficiency, and households with natural gas produce 37 percent lower greenhouse gas emissions than those with all-electric appliances.

The Center for American Progress predicts natural gas will fuel nearly half of all heavy-duty trucks, one-fifth of all medium-duty trucks, nearly half of all school buses, and two-thirds of transit buses by 2035.

The fastest growing natural gas vehicle segment is waste collection and transfer vehicles.

Rumpke Waste & Recycling currently operates 41 compressed natural gas (CNG) collection trucks based in Colerain Twp. in Hamilton County, up from 10 CNG trucks originally purchased in 2011, said Sara Cullin, a company spokeswoman.

“We are closely evaluating strategic opportunities for growing this segment of our fleet, especially possibilities in the Dayton area,” Cullin said. The region’s first retail natural gas fueling station, which opened in mid-April on Needmore Road in Harrison Twp., “makes Dayton a prime location,” she said.

Currently, there are 23 natural gas stations in Ohio, 20 of which are open to the public. A second retail natural gas fueling station is planned for downtown Dayton.

In a recent report, the AGA said much of current natural gas regulation was developed during a time of perceived scarcity. Clay said “smart decisions about our nation’s energy future” will involve removing barriers to greater use of natural gas and proactively exploring ways to grow demand.

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