LONDON, Ohio — The shale gas land rush may be over in northeastern Ohio but that doesn’t mean the questions have stopped about the Utica shale and what it means to the community.
Doug Southgate, Ohio State University, from the Department of Agricultural, Environmental and Development Economics, spoke at the Farm Science Review about the state of the Marcellus and Utica shale.
State of the shale
Southgate said that, as of Sept. 19, there were a total of 366 well permits in Ohio, Pennsylvania and West Virginia for shale gas wells. There are 133 wells drilled in Ohio and 30 wells are producing.
Currently, there are 41 drilling rigs in Ohio and 4 million acres are under lease in Ohio, according to Southgate. He added that the Ohio Department of Natural Resources expects 2,250 wells to be operating in Ohio by 2015 and Chesapeake Energy expects to be operating 1,100 wells in Ohio by 2014.
Southgate said the effects on the economy are long-term and varied, and of major interest is litigation, with lawsuits filed on surface rights, seismic testing, pipeline rights, nuisance lawsuits, inactive leases, dormant minerals and the overall interpretation of leases.
Why natural gas?
The demand for natural gas is increasing for several reasons, according to Southgate. He said there is an increasing demand for a cleaner source of domestic energy. Natural gas emits 45 percent of the carbon dioxide of coal.
The interest in natural gas is also being increased because of the proximity to northeast U.S. markets and ports.
For each well, Southgate estimates at least 13 full-time jobs are being created per well.
Property transfers
However, one major and long-term effect on the economy is with the sale of property. He said that virtually no real estate is being transferred with the mineral estate attached. This means that when landowners are selling their house or property, they are selling the surface rights, but not the minerals underneath.
Southgate said this will have an effect on the long-term land values but whether that will be positive or negative remains to be seen.
This is what people don’t get. The mere signing of a gas lease puts you in jeopardy of not being able to sell your land for what it’s worth and none of the people leasing are realizing that the long term added costs of insuring your land will be greatly increased. What may look like a nice payday now, will definitely turn into a long term detriment. If you just want the money and don’t care about your water and the future of you and your neighbors, by all means lease. But if you love your land, walk away. If you care about your neighbors and the children of the area, walk away. We have the sick children in PA to prove what I’m saying.