Hoping to jumpstart a floundering state economy, Ohio Gov. John Kasich (R) is spearheading an effort to tap abundant oil and natural gas deposits buried thousands of feet below ground in the Buckeye State.
Kasich, who took office in January, wants Ohio to develop an exploration industry that will provide jobs and lure businesses to his state by providing them with affordable energy. To that end, he is encouraging legislation in the Ohio General Assembly that would allow for oil and gas drilling in state parks and other state-owned properties.
Specifically, bills making their way through the House and Senate would create a five-member Oil and Gas Leasing Board, which would have authority to lease state-owned lands for oil and gas drilling.
Parks Would Benefit
Proceeds from the drilling would go to the agencies that own the land. The money is desperately needed. Ohio’s state parks are facing a $500 million backlog of repairs. Similar programs in Pennsylvania and Michigan have generated $134 million and $178 million, respectively.
Only lands where the state government owns the mineral rights would be considered for energy production. The only state-owned lands under consideration are located in eastern Ohio, where the geology is favorable for oil and gas drilling.
“We’re discussing an issue that’s been kicking around the General Assembly for the last few sessions, and the time to act is now,” Sen. Kris Jordan (R-Columbus) told the chamber’s Agriculture, Environment and Natural Resources Committee in late March, according to The News Leader on March 23. “Rather than continue to allow Ohio’s energy future to be determined for us by madmen and dictators in foreign lands, we have a chance to take advantage of the natural resources we have beneath our own feet.”
Environmental activist groups are attacking the plan.
“Drilling creates odors, noise, and eyesores from drilling rigs and wellheads,” the Ohio chapter of the Sierra Club said in a press statement. “Access roads, pipelines, and maintenance activities require clear cutting forests, which would disrupt wildlife habitat and migration patterns.”
Stimulating the Economy
The GOP-controlled General Assembly is expected to pass the legislation, and no one doubts Kasich will sign it into law. Meanwhile, oil companies are flocking to Ohio for a chance at one of the last big oil fields left in the United States. Chesapeake Energy Corp. has already spent more than $1 billion acquiring mineral rights on more than one million acres in the Utica Shale, the richest deposits of which are believed to be in eastern Ohio. The Utica Shale lies beneath the more famous Marcellus Shale.
Petroleum geologists have long been aware of the Utica Shale’s potential. Pete MacKenzie, president of the Worthington, Ohio-based MacKenzie Land & Exploration geology exploration firm, says Utica shale production can make a strong positive contribution to the state’s economy.
Citing “The Marcellus and Utica Plays in Ohio,” a March 2011 report by Ohio State Geologist Lawrence Wickstrom and scientists with the Ohio Geological Survey, McKenzie said, “Using a 5 percent recoverable factor, there are 17.7 trillion cubic feet of [recoverable] natural gas and 5.5 billion barrels of [recoverable] oil in Ohio.”
The U.S. Energy Information Administration reports natural gas sells for approximately $10 per thousand feet. Oil is currently selling for more than $110 per barrel.
Bonner R. Cohen, Ph. D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.