OH Senate Passes Bill to Expand Shale Drilling on State-Owned Land
Two days ago, MDN told you about Ohio House Bill (HB) 507, a “poultry” bill that (at the last minute) was amended by the Ohio Senate to redesignate natural gas as a “green” energy source and also a measure expanding drilling on and under state-owned land (see Ohio Senate Bill Would Expand Shale Drilling on State-Owned Land). And just like that, the Ohio Senate voted to approve the bill as amended. Which has the lefties at the Cleveland Plain Dealer really steamed…an extra bonus in our book!
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Last week (Nov. 28-Dec. 4), the number of permits issued to drill new shale wells rose slightly to 21 from the prior week’s 17. The big surprise is why. Pennsylvania only handed out five new permits. Ohio issued even fewer–just three. It was West Virginia with 12 new permits that saved the day.
There are advantages and disadvantages to being publicly or privately owned. In the oil and gas sector, most large companies are publicly owned–meaning they have a board of directors, and the “owners” hold shares of stock in the company, shares traded on public exchanges. In the Marcellus/Utica, most of the top drillers are publicly owned: Range Resources, Coterra Energy, CNX Resources, EQT Corporation, Antero Resources, Southwestern Energy, Repsol, National Fuel Gas Company (i.e. Seneca Resources), and Gulfport Energy. Several others are privately owned, including Ascent Resources (Ohio’s largest natural gas producer and the 8th largest natural gas producer in the U.S.), Greylock Energy (based in West Virginia), and Olympus Energy (which drills in the Pittsburgh suburbs).
The Plastics Industry Association (PLASTICS) has just published its “2022 Size and Impact Report” (Executive Summary below). In general, the report shows how the U.S. plastics industry, which is critical and necessary for modern existence, is growing. Manufacturing plants that use plastics once moved overseas and are now returning the U.S. Why? To take advantage of cheap plastics being produced here as a result of shale energy. Here’s something that surprised us about the report: Ohio is the #1 state in the entire country for the number of jobs in the plastics industry. Ohio beat out both California and Texas (the two most populous states in the country) in plastics employment. Wow!
When we first spotted an article by PBS titled “Why Ohio’s top oil and gas producing counties continue to lag in jobs,” we were intrigued. The “deck” of the article (the little subtext directly under the headline) says, “A decade into Ohio’s shale gas boom, seven Appalachian counties still have unemployment rates that exceed the state average. Experts and local sources suggested four reasons why fracking hasn’t closed the gap.” The implication is that fracking and the jobs it could and would create were oversold. Jobs from fracking are smoke without fire. Yet the article itself appears to prove just the opposite–that fracking HAS led to a dramatic increase in jobs in Ohio.
While tracking the active rig count week by week can give you a little sugar high, we think tracking the count month by month is more illustrative of where the count (and drilling activity) is heading. Baker Hughes is the grandaddy of rig counts, having tracked rigs since 1944. You need a rig to drill a new well, so counting active rigs gives you an idea of overall drilling activity. What do the rig counts look like for Pennsylvania, Ohio, and West Virginia over the past two years? Is drilling activity going up, or down, in our region? We have the answer.
In 2020, EOG Resources, one of the largest oil and gas drillers in the U.S. (with international operations in Trinidad and China), sold *all* of its Marcellus assets, which were located in Bradford County, PA, to Tilden Resources for $130 million (see 
Earlier this year, Equitrans Midstream announced it had filed a new pipeline expansion project with the Federal Energy Regulatory Commission (see 
We have chronicled a number of companies that buy royalty and/or mineral rights from landowners in the Marcellus/Utica over the years (see our previous stories about royalty mineral rights sales 
Ascent Resources, originally founded as American Energy Partners by gas legend Aubrey McClendon, is a privately-held company that focuses 100% on the Ohio Utica Shale. Ascent is Ohio’s largest natural gas producer (352,000 leased acres) and the 8th largest natural gas producer in the U.S. The company issued its third quarter update yesterday. Ascent averaged production of 2.34 Bcfe/d for the quarter, up significantly from the 1.98 Bcfe/d it averaged in 3Q21 (18% increase). Production was also up from the 1.97 Bcfe/d produced last quarter, 2Q22 (19% increase). Nearly all of Ascent’s production (94%) was natural gas, while the rest was oil and NGLs.