Ohio sitting on a huge source of new energy

MARIETTA If you believe the increased use of natural gas can play a pivotal role in ensuring both energy reliability and cleaner air in America — and I do — then you’ll be interested to know that Ohio rests on the edge of a revolution in energy production. 

New technological advances, notably horizontal drilling coupled with the time-tested process of hydraulic fracturing, are allowing companies to drill deep into the Earth to a rock formation called the Marcellus Shale that is estimated to hold a treasure trove of natural gas.

Geologists estimate that the Marcellus — encompassing more than 50,000 square miles and stretching from West Virginia and eastern Ohio to Pennsylvania and upstate New York — may contain more than 50 trillion cubic feet of natural gas. This represents nearly 25 percent of our current recoverable reserves of gas in the United States.

This natural gas resource is ideally located within pipeline reach of major cities in the eastern United States and the Midwest. Experts estimate that the gas expected to be produced from the Marcellus shale may be worth as much as $1 trillion over its producing life, and landowners stand to collect one-eighth or more of that anticipated revenue.

Competition for this resource has produced a significant increase in leasing and drilling activity across Appalachia, with companies buying mineral rights to gas that is as much as 9,000 feet underground.

Interest in shale gas is so strong that it’s taking place despite a surplus of natural gas on the market and a drop in natural gas prices in the past year from a high of almost $12 per thousand cubic feet to a recent low of $4.

All of this activity is happening at an opportune time as conventional gas production in the United States and imports from Canada have been declining in recent years.

The importance of current and future shale gas production cannot be overstated. It is providing thousands of jobs and substantial revenue for landowners as well as federal, state and local governments.

Moreover, this resource won’t be quickly depleted. Geologists say that shales in different parts of the United States may hold as much as 842 trillion cubic feet of recoverable natural gas. At current consumption rates, that’s enough gas to last the U.S about 40 years.

Given the size of this unconventional resource, some question the need to open more offshore areas for oil and natural gas development or the need to build more terminals for importing liquefied natural gas. If we expect to meet the projected need for more natural gas in the years ahead — demand would be ramped up even more if the administration imposes controls on carbon dioxide emissions and promotes the development of natural gas-fueled vehicles — we will need a balanced mix of gas supplies from both domestic and foreign sources.

What must be avoided are additional state and federal taxes.

In Pennsylvania, a proposed severance tax on shale-gas production has sent the wrong message to companies facing increased expenditures for gas well drilling and completion equipment. Likewise, a windfall oil-profits tax or other federal taxes will only discourage domestic oil and gas production just as it did in the 1980s.

The Obama administration’s recent decision to scrap an Interior Department plan to allow offshore leasing in previously untapped areas certainly has not instilled confidence that it will produce an energy policy that, over time, gives us a fighting chance to control our own energy destiny.

The good news is that shale gas production capacity in the United States has nearly doubled since 2000. The opportunity to tap unconventional sources — not only shale but also natural gas in tight sands and coal beds — offers hope that we can begin reducing our dependence on imported oil while reducing carbon emissions that are fouling our environment.

Robert W, Chase is chairman and Benedum Professor in the Department of Petroleum Engineering and Geology at Marietta College in Marietta.

Brought to you by:

Public Relations Committee

Enzo Perfetto, Chairman

Home Builders Association of Greater Cleveland

6140 West Creek Road

Independence, Ohio 44131

(216) 447-8700

(216) 524-0758 fax

“Our mission is to propagate positive articles about Northeast Ohio.”

(If you do not want to be included in future releases, please hit reply and ask to be removed from list.)

In 2008, Ohio exports grew to more than $45 billion, a 7 percent increase from the previous year. Ohio is the seventh-largest exporting state in the nation and is the only state to increase exports every year since 1998.

Well over 200 countries receive exports from Ohio. The state’s largest export markets include Canada, Mexico, Japan, China, Brazil and European Union countries. The state’s top product exports include machinery, vehicles, plastics and optics.

Ohio’s continuous export-success is an indicator of the size and strength of the state’s manufacturing economy, which is bolstered by a competitive business environment, easy access and multiple modes of transportation, and a skilled workforce . To help Ohio companies explore global trade opportunities and generate continued success in exporting, the Ohio Department of Development’s Global Markets Division manages a network of international offices in Asia, Australia, the Eastern Mediterranean, Europe, India, North and South America, and Southern Africa.

Brought to you by:

Public Relations Committee

Enzo Perfetto, Chairman

Home Builders Association of Greater Cleveland

6140 West Creek Road

Independence, Ohio 44131

(216) 447-8700

(216) 524-0758 fax

“Our mission is to propagate positive articles about Northeast Ohio.”

(If you do not want to be included in future releases, please hit reply and ask to be removed from list.)

Home prices in Cleveland market fall far less than nationwide

Home prices nationwide fell at a record pace in the fourth quarter of 2008, though prices in the Cleveland market declined at a considerably smaller rate than other markets, according to a widely watched industry report released today.

The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008 compared with the like period of 2007. Its index of 20 major metropolitan areas fell 18.5%, also a record.

You can find a pdf version of the report here. If you go here, you can find home price data for the last 20 years, as compiled by Standard & Poor’s.

All 20 metro areas in the S&P Case-Shiller 20-city index recorded declines. Eight of those markets saw prices fall by more than 20%.

By contrast, prices in the Cleveland-Mentor-Elyria market fell just 6.1% in the fourth quarter of 2008 compared with the like quarter in 2007. Only Denver, which saw prices fall 4%, and Dallas, where prices were off 4.3%, experienced smaller rates of decline than the Cleveland market.

Brought to you by:

Public Relations Committee

Enzo Perfetto, Chairman

Home Builders Association of Greater Cleveland

6140 West Creek Road

Independence, Ohio 44131

(216) 447-8700

(216) 524-0758 fax

“Our mission is to propagate positive articles about Northeast Ohio.”

(If you do not want to be included in future releases, please hit reply and ask to be removed from list.)