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Economy and Business


A major piece of the picture is just now emerging
After the exploration, the drilling, the facking, and the pumping, there is another critical step in exploiting Ohio's oil and gas resources
by WKSU's TIM RUDELL


Reporter
Tim Rudell
 
Gas pipeline marker in southern Stark County. Most pipes run underground, although there are relay points, and other areas of most pipeline right-of-way that bring the pipe above the surface
Courtesy of Rudell
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In The Region:

Some 4 million acres of Ohio have been leased for shale drilling, and that numbers growing just about daily.  Drillers already have paid roughly 10 billion dollars to land owners.  And horizontal drilling and fracking are underway at 150 new well sites, with hundreds more waiting for equipment to arrive.  But, WKSU’s Tim Rudell reports that it’s another phase of the drilling boom—pipelines -- that may affect Ohio in the biggest way of all.

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There’s more…
The “tsunami” that is our shale boom is coming in waves; billion-dollar waves.  And the next floodtide of big dollars, and perhaps big tradeoffs, has to do with pipes.

Jim Henson remembers being approached to sell some right of way on his 20 acres east of Robertsville near the Stark-Carroll county line.  “He finally…said…oh, I’ll pay you $30 a foot; so that’s $30,000.” 

Chesapeake Energy, the highest-profile explorer bringing horizontal drilling and fracking to bear on the Utica shale under Ohio, wants to run a 980-foot pipe from across his property. 

That’s because, no matter what technology is used to pull oil and gas from underground, drillers need something to move those assets  to processing plants, markets, and end-users.  Pipes, specifically pipe-lines, do that.

Who is watching?
John Williams works for Ohio’s Public Utilities Commission, which oversees many of the nearly 8-thousand miles of gas and oil pipes already in Ohio. He says the lines fall into three categories: production, gathering and transmission, and distribution. And what each line does determines who among state and federal agencies has regulatory responsibility. “What we do is we’re out there every day on transmission pipelines, on distribution systems; and some gathering lines.  From the wellhead, until that point where the PUCO’s jurisdiction will pick up, that’s typically under the jurisdiction of the Ohio Department of Natural Resources.”   

The PUCO has a dozen inspectors assigned to pipelines, and is hiring more because of the shale gas boom. Williams says they’ll monitor industry growth to keep sufficient.  

Dangers
And, inspection and regulatory enforcement can be critical given the risks in moving volatile and flammable materials through the countryside and to people’s homes and businesses.   

John Zehentbauer has a farm in Columbiana County.  On a winter night a little over a year ago, a big jolting thump came from beyond the hill south of his house: a truck, or maybe tractor, accident he thought.   But as he went outside and heard the roar, he remembered the 36-inch gas line over there.
“It was a crystal clear night.  And I looked to the south the stars were cloudy. The line had split underneath the road and the gas was blowing out into the air and making the stars look as they did.” 

And the haze seemed to be moving, like heat waves over a summer highway, but not for long.

“It ignited, down over the bank, probably two or three hundred yards," Zehentbauer remembered. "And then it formed up into this fireball and it lit straight up…as high as you could see.  I was three quarters of a mile away and it was just towering over me. I looked up and I thought the world was coming to an end.”   

The flash and firelight in the sky were seen as far away as Canton, Youngstown and Steubenville. Local volunteer fire departments responded, but could do little at the scene, beyond closing roads to keep the curious at a distance.

“They had to go down to Carrollton to shut the gas valves off; and let it burn out," Zehentbauer said. "And it just turned the snow brown—with just pulverized rock.  That heat, it incinerated that rock and blew it up and the air. And then it fell in a strip about a mile long, and turned the snow and everything brown.”

Once and Future
Although no one was hurt by the blast, or a similar one in Morgan County last year, there have been injuries -- and fatalities-- from pipeline explosions in Ohio going back to the earliest use of natural gas in the 19th century.

And the supply of -- and demand for -- energy been growing exponentially since then. With tens of billions of dollars now at stake in just the gas and oil being squeezed from shale under Ohio, more pipelines are being built -- even if not everyone wants them. 

Saying No
Despite the promise of $30,000 for a pipeline easement on his Robertsville acreage, Jim Henson doesn’t want it. For him, it comes down to land use.
“I took you down there and said I’m gonna sell you this piece of ground pal.  But there’s a right-a-way there that’s 70 feet that way, and you got this road here.  You got this little piece in the middle.  You could maybe put up a dog house or something.”

Industrialization
Henson also doesn’t like pipes because, even though he is a master welder and owner of a local metal fabrication and maintenance business, and has worked on pipe himself, he sees the sheer magnitude of the construction plan now ruining the rural character of the countryside.
“I imagine that sooner or later,…they’re gonna get it one way or another. They’re not gonna stop.“

Business forecasts show Ohio’s pipeline infrastructure, already the nation’s 10th largest, will have to double or more to support the shale-drilling boom.  And, an 8,000-mile or more expansion could mean another billion dollars or more for just lease rights; and, eventually another $10 billion to $15 billion with construction. 

Economic recovery
And businesses, from field-equipment maker MAC Trailer in Alliance, to pipe manufacturer V&M Star in Youngstown, are expanding and hiring as a result. Though not for pipelines, Timken Company is expanding its specialty steel mill outside Canton to the tune of $225 million.
CEO “Tim” Timken, Jr. acknowledges  “a big part of the investment is to serve the oil and gas markets. Last year we did about a half a billion dollars’ worth of oil and gas related products. As this facility comes up, it will allow us to serve that market even more. “

And, one more economic wave seems to be building momentum too.  At least $2 billion  has been committed by energy companies in just the past 90 days toward construction of gas and oil processing plants in eastern Ohio. 


Related WKSU Stories

Ohio lawmakers debate the demands of drilling on Lake Erie
Tuesday, April 24, 2012

Ohio watershed district agrees to temporary water purchase
Friday, April 20, 2012

U.S. EPA issues regulation update
Wednesday, April 18, 2012

Ohio comes up with first guidelines for drilling in state parks, and House Speaker says a higher fracking tax is still being considered.
Thursday, April 12, 2012

Stark County is a "sweet spot" for fracking
Monday, April 9, 2012

Listener Comments:

Good story and it's sad but true that many are sacrificing the rural character of this area for easy money. Good for Jim Henson who has the will to say "not me" without a fight.


Posted by: marty chapman (Minerva,Ohio) on April 26, 2012 1:04AM
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