Editorial: Gas Industry Gushing Over Encouraging Signs
March 13, 2017
Canton Repository. In the volatile oil and gas industry, it has been a few years since the overall outlook has been encouraging.
Signs lately, however, give industry followers reasons to be optimistic. Prices are trending in an upward direction, federal approval has come for several projects and the administration of President Donald Trump was barely in office when it backed two long-stalled, controversial pipeline projects: Keystone XL and Dakota Access.
Locally, evidence of positive movement in the industry soon will be visible as miles of steel pipe begin to ship from the Republic Short Line rail yard in Massillon. The pipe, some sitting at the former locations for Republic Steel and Massillon Stainless facilities for nearly two years, will head to construction sites as part of the 713-mile Rover Pipeline that recently received final federal approval.
Rover’s twin 42-inch pipelines will cross southwestern Stark County (Pike, Bethlehem and Sugar Creek townships) and parts of Tuscarawas and Carroll counties as it delivers up to 3.25 billion cubic feet of natural gas a day from the Utica and Marcellus shales to destinations in the Great Lakes, Midwest, Gulf Coast and Canada.
The lack of infrastructure to transport gas to out-of-state markets has been one of the biggest challenges facing Ohio’s oil and gas industry.
The other challenge, of course, has been the commodity’s price. The good news: Spot market prices have reached their highest levels since 2014. The still-worrisome news: Those prices remain far below peaks that were reached nearly a decade ago, according to the U.S. Energy Information Administration.
“There is a more optimistic mood now because we just came through a real trough and hopefully we’re going to see some moderate, continued increases,” Mark Jordan, president of Knox Energy, an oil and gas producer based in central Ohio, said at the Ohio Oil and Gas Association’s recent winter conference.
Companies continue to invest in the Utica region.
Rex Energy has said it plans to spend up to $80 million drilling and fracking wells this year. As much as 20 percent of that money will be invested in its Utica holdings in Carroll County.
The company plans to complete 26 wells and begin production from 23 wells during 2017. On the flipside, Rex has said it doesn’t plan to spend any money on new drilling in the Utica Shale in 2018.
So how soon until we see higher levels of drilling activity? Experts coming to Canton hope to help answer that question at the next Utica Upstream seminar. Produced in part by the Canton Regional Chamber of Commerce, the daylong session is scheduled for April 5.
We’ve said repeatedly there will be fits and starts with Utica Shale development. People and businesses, inside and outside the industry, must take a long view.
“It’s great to see excitement in here,” Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, said at the group’s conference. “Last year was very solemn. People were worried, very worried.”
We join the industry in embracing the encouraging signs of late.
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