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As we wind down 2016 and look ahead to 2017, it’s time to stop and take look at how amazing Ohio’s Utica Shale production has been despite a significant pullback in drilling activity due to low commodity prices. After six years of exploration and production, Utica continues to break production records and the best wells continue the trend farther down the Ohio River. For the past few years, EID has been researching this trend and reporting what we see first-hand on the ground. Our extensive research and analysis has led us to select Monroe and Belmont counties as the Ohio Utica counties to watch in 2017.
EID chose Monroe County as one of the Utica counties to watch in 2015, and we were correct, as more and more staggering natural gas production started coming out of this region that year. Still, Monroe County’s full potential has been impeded by bureaucratic inertia since 2011, as the Bureau of Land Management (BLM) adjudicated whether or not minerals could be leased for fracking. The process had seemingly no end sight, creating uncertainty for operators and, in many ways, bringing exploration in the county to a halt.
That could change this year, however, as the Wayne National Forest finally decided to allow leasing of federal minerals in Monroe County. Thanks to a recent Bureau of Land Management (BLM) lease sale that yielded $1.7 million to taxpayers, it’s very likely that Monroe County will begin to see development move faster. This has been great news for the landowners who have been anxiously awaiting the opportunity to have their land and minerals developed.
It’s also great news for local schools, particularly Switzerland Local School District, which will now be able to collect property taxes from development off royalties from oil and gas production in the Wayne National Forest. Switzerland Township is already home to five out of the top 20 natural gas wells in the first three quarters this year, two of which were in the top five producing gas wells thus far.
This is Belmont County’s third consecutive year on our “counties to watch” list, and considering it has the highest producing natural gas wells in the state, it really should come as no surprise. Four of the county’s townships — Wheeling, Smith, Washington and Goshen — are enjoying surges in natural gas production. Smith Township’s production surge has been driven by Rice Energy’s incredible Mohawk Warrior wells, which have held top production spots in each of the first three quarters this year.
Belmont County’s terrific geology isn’t the only reason it’s once again a county to watch. It will also be the potential home to a multi-billion dollar ethane cracker plant. The state of Ohio has invested $14 million to clean up the potential plant site in preparation for this massive investment. Still, a formal announcement to break ground has yet to take place. It was initially believed that the company looking at the site, PTT Global, would announce a formal commitment late this year, but it now appears that will take place in early 2017.
With so much production coming out of this region, the need for energy infrastructure such as pipelines, compressor stations, gathering lines and cracker plants simply cannot come soon enough. Once this energy infrastructure comes on line, it appears the sky is the limit for Belmont County moving forward.
In addition to having exceptional geology for natural gas exploration, Belmont and Monroe Counties have ideal access to roads, rail and the Ohio River — all of which are vital to supporting manufacturing and exporting services. Thanks to companies who have invested billions in exploring and producing the Utica Shale area in Ohio, this region of the country is enjoying the cheapest natural gas prices in the world. With those facts considered, we look forward to watching these two counties next year and expect more great news to come from Monroe and Belmont Counties.