Ohio: The Center of American Energy Transformation
Low-cost feedstock accessed through breakthrough technology, unrivaled proximity to markets and $78 billion in investment places Ohio among America’s new energy leaders
For years, the numbers were clear: The Gulf Coast was the place in North America for energy investment. Today, energy investors are recognizing the greater profitability potential of Ohio’s shale plays.
Ohio sits atop much of the Utica and Marcellus shale formations, the geological structures beneath Ohio, West Virginia and Pennsylvania that have accounted for 85 percent of U.S. shale gas production growth since the start of 2011. These shale plays contain large amounts of natural gas, natural gas liquids and crude oils. In fact, by 2030 they are expected to account for more than 40 percent of the nation’s natural gas production.
The only thing better than having the lowest natural gas prices in the developed world is having them in proximity to customers. Ohio resides within a day’s drive of 50 percent of America’s high-demand markets and 70 percent of polyethylene demand. Just as important as being close to market, Ohio is far removed from the damaging and costly effects of repeated storms and dramatic flooding.
Ohio’s access to plentiful and low-cost feedstocks, combined with its location near end markets, make the state a highly favorable option for midstream and downstream investments. In Ohio, producers can:
- Take advantage of a rapidly growing energy industry that has attracted nearly $78 billion in investments along the entire value chain, including upstream and midstream developments that have resulted in downstream expansion and new construction
- Benefit from an efficient start-to-finish construction process, thanks to state law that requires the Ohio EPA to issue permits within 180 days and a highly trained construction workforce known for completing projects swiftly, within budget and with minimal lost time
- Prosper in a vibrant market consisting of multi-modal transportation capabilities that provide national and global access; a growing business population seeking low-cost energy; and a deregulated power market offering unique and customized plans as well as a robust electrical grid
Many companies along the energy supply chain are located in Ohio, including Marathon, Columbia Gas of Ohio, DuPont, Encino Energy, PPG and Nutrien. The shale formations are adding to Ohio’s proven place as an energy leader, but Ohio’s energy leadership doesn’t stop there. The state is No. 1 in polymer and plastics output and the No. 1 consumer of polyolefin in the Midwest. Now, with one cracker under construction in the tri-state region and another in development, Ohio is fast becoming a new regional ethylene market.
In order to power the world, an environment with the right mix of resources is needed. Look no further than Ohio.
Study estimates Ohio Valley region will supply nearly half of nation’s natural gas and nearly a fifth of natural gas liquids by 2040. The IHS study for the first time quantifies the production trends and economic benefits likely to emerge from the Marcellus and Utica shale formations. The low cost of feedstock and close proximity to end user markets is expected to lead to a second petrochemical hub in the tri-state area of Ohio, Pennsylvania and West Virginia.
Ohio’s natural gas industry has been the biggest driver of energy growth in the United States for the last four years, largely due to the Utica and Marcellus shale deposits in eastern Ohio. Cleveland State University’s Maxine Goodman Levin College of Urban Affairs put together the Shale Investment Dashboard in Ohio. This information documents the growing impact of Ohio in the national natural gas industry.
The Future for Natural Gas Production is in Ohio
Ohio’s Appalachian Region currently produces 30 percent of the country’s natural gas supply, a growth of 900 percent since 2010.
In this video, Wally Kandel, founder of Shale Crescent USA, shares with Bloomberg how, thanks to the Utica and Marcellus shale formations, the Shale Crescent will supply 37 percent of U.S. natural gas by 2040. Learn more about why major energy and petrochemical companies are investing in Ohio.