By DOUG GRAVES
COLUMBUS, Ohio — There were several speakers at last month’s Power Show Ohio in Columbus, but when Ohio State University extension educator Stephen Schumacher began giving updates on shale oil and gas activities in eastern Ohio, a standing-room-only crowd surrounded him at the podium.
Schumacher, of Belmont County extension, provided an update on the progress of “fracking” in eastern Ohio and the effect it has on landowners in those counties. Not surprising, farmers and landowners in western Ohio anticipate the westward movement of this controversial and, often, profitable technology.
“Just because it’s happening in eastern Ohio doesn’t necessarily mean that it will happen elsewhere,” he said. “The industry is still finding out a lot about the geology and where the hotspots are.
“You also need to consider the low price of natural gas. Ohio isn’t the only state in the nation with shale and this new fracking technology, so supply and demand all plays a factor in expansion.”
In the past two years eastern Ohio has seen an increase in the development of oil and gas wells that have been financially beneficial to the counties, townships, villages and families that have allowed leases to be signed and wells to be drilled.
“And we haven’t seen anything yet,” Schumacher said. “Chesapeake Energy has been in the ballgame for some time and they are starting to ramp things up a bit. Now you have more companies coming into the state, so the number of permits has gone up greatly in the past few months and we look for that to increase in the years to come.”
To date there are 48 Utica shale wells in production, with 200 wells having been drilled and 500 granted permits. According to the Ohio Department of Natural Resources, by 2015 more than 2,000 wells will be drilled in Ohio.
The practice of combining hydraulic fracturing with a new technique called horizontal drilling has unlocked the door to those deposits – and to visions of wealth and clouds of controversy.
“In my 27 years as an Ohio State extension educator, I’ve never seen anything like this as far as the educational need and the economic impact,” Schumacher said, referring to the impact this technology has had on Belmont County. “You can’t go anywhere in our county – to a coffee shop or the county fair, to a gas station or a diner – without hearing people talking about it.”
On the increase are figures tied to lease agreements. Mineral rights leases in eastern Ohio were selling for $15-$25 per acre just four years ago. One of the latest contracts signed, Schumacher said, was for 25,000 acres of ground at just shy of $7,000 an acre.
The million-dollar question is, will these new domestic resources of gas only be found in the eastern and southeastern parts of Ohio? Mike Hogan, with OSU extension in Fairfield County, recommends landowners proceed with extreme caution through the leasing process.
“Landowners need to educate themselves about the industry before they can understand how they can be a part of this industry as leaseholders,” he said. “They need to understand how to negotiate leases, which will not only maximize the economic return but also protect their assets, both financial and natural resource assets, for future generations. They also need to engage an attorney who is knowledgeable about oil and gas issues.”
Extension conducts educational workshops n all of these topics for those who may be considering leasing their land for oil and gas production.
“We have found that landowners who participate in these workshops receive, on average, a little more than $400 more per acre for the lease they sign, compared to landowners who have not participated in the workshops,” Hogan said. “The other point landowners need to consider is that this resource has been around for millions of years, and it isn’t going anywhere.
“Right now we are hearing about land men, particularly in south-central areas of Ohio, attempting to get landowners to sign leases for ridiculously low amounts, and telling them that this will be their last chance to sign a lease. Obviously, this just isn’t accurate at all.”
Another factor to consider is that Ohio’s infrastructure for major production of shale gas, including processing plants and pipelines, isn’t even close to being ready. Opposition for this ongoing development will always be part of the process, according to Schumacher, but the best way to move forward for all concerned will be to work together.
“We need to be concerned about our land and concerned about our environment,” he said. “More education is needed with landowners, communities, agencies and the gas companies. The more we work together to try to do things right and avoid problems, the better.”