Ohio gas, oil essential to economy
It may seem difficult to look beyond pandemic-related economic challenges to spot the opportunity for growth in the Valley. However, as our communities move forward toward recovery, and begin to move past a year of immense, unpredictable challenges, there is something that brings us hope: natural gas and its connection to Ohio manufacturing.
It’s against the backdrop of this “new normal” that the Youngstown / Warren Regional Chamber last week focused our Salute To Business keynote address on the opportunity to leverage Ohio’s natural gas and oil production for a manufacturing resurgence. Although selected prior to the pandemic, this year’s theme remained fitting, as our country searches for solutions to re-shore American manufacturing jobs and make critical products at home once again.
The natural gas and oil that Ohio produces will play a renewed role in attracting and expanding local manufacturing of needed medical supplies, pharmaceuticals, protective gear, and goods that are all too often produced overseas.
It’s a simple connection — natural gas and natural gas liquids, such as ethane, butane and propane, are necessary feedstocks in the manufacturing process. Many industrial manufacturers need a reliable, affordable natural gas supply to run steam engines, blast furnaces, or even to just turn the lights on.
And thanks to abundant natural gas produced across Appalachia, industrial users in the tri-state region have realized nearly $25 billion in savings over the past decade, increasing the attractiveness for new manufacturing investments, according to a joint ShaleCrescent USA and Ohio Oil and Gas Energy Education Program report.
But the Valley’s biggest manufacturing opportunity comes in the form of petrochemical manufacturing — the process in which natural gas liquids are broken down and reformed into the building blocks for durable goods essential to life. From masks to ventilators, phones, computers, and millions of everyday consumer products, Ohio-produced natural gas and oil serves as a critical manufacturing feedstock.
The more we leverage natural gas to bring manufacturing back to the Valley, the better for our economy and the region. Manufacturers in Ohio account for nearly one-fifth of total economic output in the state, employing 12.5 percent of the workforce, or nearly 700,000 Ohioans, according to National Association of Manufacturers (NAM) data.
Manufacturing’s growth in Ohio is closely correlated with the start of the shale revolution in our state. Since 2010, Ohio manufacturing output has risen nearly 40 percent, hitting $112 billion in 2018, according to NAM, as the tri-state region emerged as the world’s third largest natural gas producing area. In 2019, natural gas production in Ohio was 30 times greater than 2012, with the state now the nation’s sixth largest producer, according to federal reports.
In manufacturing, chemical production is Ohio’s top sector, underscoring the significant growth opportunity to leverage the region’s natural gas liquids abundance.
As progress advances on the proposed petrochemical manufacturing facility in Belmont County, the similar Shell plant under construction just over the border in Western Pennsylvania has already resulted in significant job creation for the Valley. That site, which employs close to 7,000 skilled trades men and women, has been a blessing for the region’s building trades, providing steady, good-paying employment among steamfitters, electrical workers, and operating engineers, to name a few.
That single site presents enormous spin-off opportunities for the broader region. Combined with the potential for additional petrochemical facilities, this industry represents an exciting 200-year growth potential for the Valley.
As the leading voices for economic development in the region and an organization dedicated to educating Ohioans about natural gas and oil development across Ohio, our organizations must, and will, continue to collaborate to showcase Ohio’s energy advantage, encourage manufacturers to consider the Valley for expansion, and work with schools to advance science, technology, engineering, and math curriculum — the essential skillsets necessary for tomorrow’s workforce.
Through collaborations like these, we will best position the Valley to fully realize the significant opportunities tied to Ohio natural gas and oil production — and more importantly, to bring hope back home.
Tom Humphries is president and CEO of the Youngstown / Warren Regional Chamber. John Schlichter is executive director of Ohio Oil and Gas Energy Education Program.