Oil and gas industry is Valley economic driver
The economic impact of the oil and natural gas industry in Ohio has been immense over the past decade. Whether the result of the thousands of well-paying jobs the industry has generated, or the billions of dollars invested in the Mahoning Valley and beyond, the oil and gas industry is a key economic driver in the Buckeye State.
The industry is creating economic opportunities for people in communities across Trumbull, Mahoning, Columbiana and other counties that are home to gas and oil wells, as well as the industry’s supply chain. To portray Ohio’s oil and gas industry as anything other than an economic pillar in this region of the state, as a recent report by the Ohio River Valley Institute did, is disingenuous at best and manipulative at worst.
The overwhelming majority of economic reports on Ohio’s shale investment paint a picture of investment, growth and job creation. A report released in January 2020 by Jack Kleinhenz, a nationally respected economist commissioned by the Ohio Oil and Gas Energy Education Program to study the industry, found a multitude of positive outcomes from the oil and gas investment in Ohio.
In 2018 alone, the industry generated $6.2 billion in economic activity in Ohio and paid $1.1 billion in taxes and royalties. More than 92 percent of those taxes and royalties went to local governments and landowners.
The report also revealed the oil and gas industry directly created 22,174 jobs in Ohio, while an additional 15,082 jobs are supported by the industry. This includes Youngstown-Warren area developments like Vallourec Star and the Lordstown Energy Center.
Another study conducted by Cleveland State University on behalf of JobsOhio shows compelling evidence that the oil and gas industry has had a positive effect on local economies. From 2011 to 2019, the industry invested an estimated $86.4 billion in the state — $60 billion of which was in upstream activities such as leasing, drilling, road use agreements and other fracking-related activities. Much of this occurred in Trumbull, Mahoning and Columbiana counties.
Let’s consider these positive outcomes reported by the Global Energy Institute:
• In 2018, an estimated 3.4 million jobs were connected to the direct use of natural gas, including in the manufacturing sector. These jobs added $408 billion to the U.S. GDP and accounted for $152 billion in personal income.
• Since 2010, U.S. shale gas has spurred more than $200 billion in new American manufacturing investment.
• Households that use natural gas save, on average, $900 per year.
• Natural gas provides the feedstock for thousands of products we rely on every day, including medical devices and personal protective equipment.
No other source of energy has been responsible for more CO2 emissions reductions over the past 15 years in the U.S. than natural gas. Globally, switching to natural gas reduces emissions by 50 percent when used for electricity and 33 percent when used for heating.
As we expand the use of wind, solar and other renewable sources of energy, natural gas is a necessary source of backup energy when the sun isn’t shining and the wind isn’t blowing. According to Dr. Ernest Moniz, former U.S. Secretary of Energy, “As more and more variable resources are brought into the electricity system, the more you are going to need natural gas for the balancing of that system.”
In addition, natural gas feedstock is used to manufacture wind turbines and solar panels.
Our state, and especially our Valley, are particularly well situated to benefit from several shale plays to fuel an economic resurgence powered by affordable and reliable domestic sources of energy, with many of these benefits already flowing to the community and workforce.
Guy Coviello is president and CEO of the Youngstown Warren Regional Chamber.