Energy / Hydraulic Fracturing

Oil and natural gas drilling in Ohio on the rise

OHIO — ”Escalating industry interest in the Utica Shale, which lies under the more familiar Marcellus shale and covers a wider geographic area, may boost Ohio into the ranks of U.S. States with significant increases in oil and natural gas production from horizontal drilling in shale formations. Although production volumes are still small, the number of Utica-targeted horizontal drilling permits issued to Ohio operators from January through September 2011 rose more than twenty-fold over full-year 2010.

Ohio is not presently among the U.S. States experiencing significant oil and natural gas production increases from drilling in shale formations. Although the high-profile Marcellus Shale extends partially into Ohio, its more productive areas lie to the east, especially in Pennsylvania, where most of the exploration and development activity is centered. However, the underlying Utica Shale, which covers much of Ohio and parts of several other States from New York to Tennessee, offers considerable potential.

In eastern Ohio, the Utica is thought to be relatively rich in oil and natural gas liquids that are currently worth significantly more than natural gas on an energy-equivalent basis. Preliminary estimates by Ohio’s Department of Natural Resources (ODNR) suggest a recoverable reserve potential of between 1.3 and 5.5 billion barrels of oil as well as 3.8 to 15.7 trillion cubic feet of natural gas. Industry interest in the Utica is already apparent: from January through September 2011, ODNR issued a total of 42 permits for drilling horizontal wells in Ohio’s portion of the Utica Shale. In sharp contrast, only 2 such permits were issued in all of 2010.”

U.S. Department of Energy

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The U.S. Department of Energy chart in the above story is a great example of how to manipulate information to produce a desired result.  The natural gas industry is promoting the shale gas boom, and the Department wants to help.  That’s why they took statistics from the Ohio Department of Natural Resources on horizontal drilling permits issued by month, and then stacked the results on top of each other in a chart of cumulative permits issued. So, for example, a permit issued in January 2011 appears in each bar from January through September.  The result, of course, looks like a missile taking off.

Let’s say that the Department had used the same data to create a chart of new permits issued by month, not cumulative.  Here’s what it would look like:

Not that impressive. Especially considering that just because a permit has been issued, it does not mean the well will be drilled, nor that the wells that are drilled will find anything, nor that the wells that produce gas will produce enough to be profitable, nor that the ones that are profitable will stay profitable long enough to be significant.

Maybe Ohio’s Utica Shale will become part of the shale boom. Maybe not. We won’t find out, though, from clumsy public relations by the Department of Energy.

Paul Ryder, Ohio Citizen Action