Mapping the Opportunities for Shale Development in Ohio

144 Pages·2015·5.99 MB·English

Cleveland State University
Prepared for:
MAPPING THE
THE ECONOMIC GROWTH FOUNDATION
OPPORTUNITIES
RECS SHALE COMMITTEE
JOBSOHIO
FOR SHALE

DEVELOPMENT

IN OHIO

Center for
Economic

Development
MAPPING THE

September 2015
OPPORTUNITIES

F OR SHALE Energy Policy
Center

DEVELOPMENT

IN OHIO

December 30, 2014
2121 Euclid Avenue Cleveland, Ohio

44115

THE ECONOMIC GROWTH FOUNDATION
http://urban.csuohio.edu
RECS SHALE COMMITTEE
MAPPING THE
JOBSOHIO

OPPORTUNITIES
2121 Euclid Avenue Cleveland, Ohio
44115 FOR SHALE
http://urban.csuohio.edu
DEVELOPMENT
Prepared for:
The Economic Growth Foundation
RECS Shale Committee
JobsOhio

Prepared by:
Center for Economic Development
Energy Policy Center
Maxine Goodman Levin College of Urban Affairs
Cleveland State University

September 2015
Acknowledgments

About the Research Team

Iryna V. Lendel - author
Dr. Iryna V. Lendel is an economist with experience in conducting academic and applied
research as well as analyzing regional economic development. Her research portfolio includes
projects on industrial analysis (high-tech industries, the oil and gas industry, steel industry and
the re-emerging optics industry); technology-based economic development; and the energy
policy and economics. Dr. Lendel is the Research Associate Professor of Economic Development
and Assistant Director of the Center for Economic Development at the Maxine Goodman Levin
College of Urban Affairs at Cleveland State University.
Dr. Lendel is affiliated with the Center for Energy Policy and Applications at Cleveland State
University. Dr. Lendel was a principal co-investigator on a project assessing the economic impact
of the Utica Shale development on the State of Ohio. She is a principal investigator of the
current study on the potential opportunities on downstream, midstream and upstream
industries resulting from further development of Ohio Utica shale resources and shale gas
industry in Ohio and Pennsylvania. She is an assistant editor of Economic Development
Quarterly and a Member of Editorial Board of International Shale Gas and Oil Journal; and she is
a frequent guest blogger at Crain’s Ohio Energy Report.
Bryan Townley – contributing author
Bryan Townley primarily worked with the geographic information systems (GIS) and
cartographic portions of this project, while also contributing research and writing pertaining to
midstream and downstream infrastructure and development. Townley is a graduate research
assistant with the Center for Economic Development and is a graduate student in the Urban
Planning, Design, and Development program at the Maxine Goodman Levin College of Urban
Affairs.

Jeffrey C. Dick, Ph.D. – contributing author
Dr. Dick's primary research interests are centered around ground water occurrence and
contamination, coastal processes of Lake Erie and San Salvador, Bahamas, and geographic
information system applications in the geosciences. The primary focus of Professor Dick’s
academic career has been integrating technology and field experiences to improve
undergraduate education. Professor Dick has also served Youngstown State University since
2003 as Director of Undergraduate Research. He is the chair for the geological and
environmental science department and is the director for the Natural Gas and Water Resources
Institute at Youngstown State. He previously worked for Chevron as a petroleum geologist.
Ohio Regional Economic Competitiveness Strategy
Shale Development Steering Committee Members
Don Fischbach, Co-Chair, Calfee, Halter & Griswold
Edward (Ned) Hill, Co-Chair, the John Glenn College of Public Affairs, The Ohio State
University
Paul Boulier, TeamNEO
Bill Hagstrand, TeamNEO
Thomas M. Humphries, Youngstown/Warren Regional Chamber of Commerce
Daniel E. Klimas, Lorain National Bank
John Molinaro, Appalachian Partnership for Economic Growth
David Mustine, JobsOhio
Steve Percy, former CEO of BP America
Steve Paquette, Stark Development Board
Jim Samuel, Capitol Integrity Group

Economic Growth Foundation

Jobs Ohio
About the Center for Economic Development
The Center for Economic Development at Cleveland State University’s Maxine Goodman Levin
College of Urban Affairs provides research and technical assistance to government agencies,
non-profit organizations, and private industry. The Center for Economic Development serves as
a designated Economic Development Administration (EDA) University Center, since 1985.
The Center has expertise in studying ecology of innovation, entrepreneurship, performance of
economic clusters, industry analysis, economic analysis of cities and regions, economic impact,
economic development strategy and policy, workforce development and evaluation of economic
development initiatives.
The Center’s professional staff includes four full-time researchers, associated faculty, and
several graduate research assistants. The Center works with funders, partners, and clients at the
national, state, regional, and local levels. All of the Center’s research is summarized in
publications, including working reports, journal articles, and book chapters.
For more information on the Center for Economic Development, use the following link:
http://urban.csuohio.edu/economicdevelopment/

About the Energy Policy Center
The Energy Policy Center (EPC) is housed within the Maxine Goodman Levin College of Urban
Affairs at Cleveland State University. The mission of the EPC is to help overcome social and
institutional barriers to the implementation of solutions to energy challenges by providing an
objective channel for the free exchange of ideas, the dissemination of knowledge, and the
support of energy-related research in the areas of public policy, economics, business and social
science.
For more information on the Energy Policy Center, use the following link:
http://urban.csuohio.edu/epc/
Table of Contents
Executive Summary ......................................................................................................................... 1
1. Introduction ................................................................................................................................ 7
1.1. Background, Issues Presented and Scope of Research. ....................................................... 7
1.2 Midstream Industries and Throughput Capacity. .................................................................. 8
1.3 Refining of Natural Gas Liquids and the Petrochemical Industry .......................................... 9
1.4 Research Methodology ......................................................................................................... 9
2. Utica Shale Production History and Projections ....................................................................... 11
2.1. Factors Controlling Production ........................................................................................... 11
2.1.1. Natural Gas Prices ....................................................................................................... 11
2.1.2. Midstream Infrastructure Catch Up ............................................................................ 17
2.1.3. Drilling Rig Availability and Technology Improvements .............................................. 18
2.1.4. Effects of Unitization and Stranded Leases ................................................................. 22
2.1.5. Strategies of Principal Utica Upstream Players ........................................................... 23
2.2. Volumes and Throughput Projections ................................................................................ 28
2.2.1. Projections Based Upon Publicly Available Data ......................................................... 28
2.2.1.1. Production data ........................................................................................................ 28
2.2.1.2. Well Status ................................................................................................................ 29
2.2.1.3. Production Type Zones ............................................................................................. 30
2.2.1.4. Production Distribution ............................................................................................ 32
2.2.1.5. Potential Productive Acreage ................................................................................... 34
2.2.1.6. Drilling Estimates ...................................................................................................... 35
2.2.1.7. Decline Projections ................................................................................................... 36
2.2.1.8. Throughput Projections ............................................................................................ 37
2.2.2. Midstream and Other Industry Throughput Projections............................................. 39
2.3. Midstream Company Activities .......................................................................................... 40
2.3.1. Gathering Lines ............................................................................................................ 40
2.3.2. Cryogenic Processing and Fractionation Capacity ....................................................... 42
2.3.3. Natural Gas Liquids Take Away Capacity ..................................................................... 47
2.3.4. Regional Production Compared to Regional Processing and Take Away Capacity ..... 50
2.3.5. Natural Gas Take Away Capacity ................................................................................. 57
2.3.6. Condensate Midstream Infrastructure ........................................................................ 62