Ohio's Affordable Skilled Labor Pool Ready to Meet Demands of Shale Gas Industry

COLUMBUS, Ohio, Dec. 14, 2011 /PRNewswire/ -- Shale gas is poised to become big business in Ohio and in this case, location means everything. Proximity to the population centers of the United States and Canada, along with the expected longevity of the resource, establishes the Marcellus and Utica Shale formations as an important long-term and stable source of natural gas supply for the eastern United States. Energy companies that want to maximize their investment in establishing a supply operation to support drilling, processing or delivering the natural gas derived from shale formations must identify a central location that is proximate to all five states that occupy the formation.

The Marcellus Shale formation stretches from the edge of Maryland to Pennsylvania, New York, West Virginia and the Appalachian Ohio region along the Ohio River. The boundaries of the deeper Utica Shale formation extend under the Marcellus Shale region and beyond. Shale gas has the potential to meet the total U.S. natural gas demand for generations.

Ohio's state geologist estimates that recovering 5 percent of the reserves in the 100-mile wide Utica Shale formation in eastern and central Ohio could produce 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas, making the Utica a significant contributor to the national fuel supply while creating thousands of jobs in the state. At the lower 1.2 percent recovery rate being seen in the Bakken Shale formation in the West, the Ohio play could produce 1.3 billion barrels of oil and 3.75 trillion cubic feet of gas.

Energy companies looking to achieve the fastest return on their start-up investment benefit from the Ohio Appalachian Region's optimal location in the five-state Marcellus and Utica Shale region and the state's manufacturing know-how and its world-class logistics infrastructure. Everything that made Ohio the ideal location choice for suppliers to the automotive industry is in place for Tier I and II suppliers to leverage to efficiently and affordably supply the Marcellus and Utica Shale gas industry over the life of the shale gas reserves. This standing capability results in lower operating costs and maximum return on investment.

Each natural gas well itself involves about 75 jobs ranging from highly skilled positions such as seismologists, engineers and geophysicists to construction positions and others to check meters and tend the wells. There are also a number of indirect jobs associated with the production of natural gas. The shale gas development could trigger work in many trades, from environmental consultants, to lawyers, to truck drivers, to those who train for jobs at well sites, making it important to have access to a readily available skilled labor pool.

Energy companies have a growing need for engineers, researchers and skilled manufacturing workers, which are readily available in Ohio. Ohio's colleges and universities are ready to meet the need for new technologies and skilled green collar workers through new research, degrees and training specific to the advanced energy industry through programs such as The University Clean Energy Alliance of Ohio (UCEAO) and investments through Ohio Third Frontier.

In addition, a number of colleges and universities throughout the state, such as Kent State University, Hocking College, Marietta College, The Ohio State University, and Zane State University, offer world-class natural gas industry training programs.

Youngstown State University recently announced the development of a new institute designed to educate professionals and provide research for the emerging multi-billion dollar shale natural gas industry. The YSU Natural Gas and Water Resources Institute will provide bachelor's degree level courses in science and engineering that will lead to an academic minor in gas technologies and also will provide research opportunities for industry focusing on analysis of water used in the shale gas extraction process.

"Given YSU's location in the heart of the Utica shale region, this new Institute is well-poised to meet the educational and research demands and needs central to this new and growing industry," said Martin Abraham, dean of the YSU College of Science, Technology, Engineering and Mathematics, in which the new institute will be located.

Ohio's competitive tax structure supports the growth of companies involved in the extraction of Marcellus and Utica Shale. The state's broad-based, low-rate commercial activity tax rewards entrepreneurship by charging no tax on the first $1 million in gross receipts. Companies with sales between $150,000 and $1 million pay a flat fee of $150. In Ohio, the playing field is level for manufacturers because all companies are taxed at the same low rate.

And, perhaps the most significant tax benefit supply chain companies will gain is that products or services sold to customers outside of Ohio are not taxed by the state; so, companies located in Ohio can easily do business with the other four states located in the Marcellus and Utica Shale region without having to pay Ohio state tax on revenue.

Many companies have expanded their business in Ohio due to the state's ideal location in the five-state Marcellus and Utica Shale region. In Youngstown, V&M Star announced a $650 million investment in 2010 as a direct result of providing material to the Marcellus and Utica Shale industry. In Steubenville, a city in Appalachian Ohio, more than 300 new jobs have already come to the area from investments in shale gas, with as many as 10,000 more expected in the next three years. In Boardman, Dearing Compressor & Pump Co., a manufacturer of industrial pumps and compressors used in natural gas drilling, invested $3 million in a new assembly plant to expand its production capacity.

Ohio's central location, skilled workforce and friendly business environment are just a few of the key benefits for energy companies involved in the commercial development of Marcellus and Utica Shale gas, according to Ed Burghard, executive director of the Ohio Business Development Coalition, the nonprofit organization that markets the state for capital investment.

Ohio promises a perfect balance that allows business owners, their employees and their families the opportunity to achieve both their professional and personal aspirations without having to sacrifice one for the other. Ohio offers businesses an environment that makes it easy to foster work-life balance. The convenience of travel, with short commutes from work to home, lower stress and give more time to priority family activities.

"In Ohio, work-life balance is more than a buzzword; it's the way we do business," Burghard said. "Companies are trying harder to help their employees achieve better work-life balance because this positively impacts a company's bottom line. Ohio's low-cost, low-stress communities and short commutes create the State of Perfect Balance, where you can achieve both professional and personal success without sacrificing one for the other."

About the Ohio Business Development Coalition

The Ohio Business Development Coalition is a nonprofit organization that provides marketing strategy and implementation to support Ohio's economic development efforts. For more information, visit www.ohiomeansbusiness.com.

SOURCE Ohio Business Development Coalition