Drilling activity expected to return
EAST LIVERPOOL — It may only be a matter of time before oil and gas activity increases again in Columbiana County.
That was the message delivered by Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, who attended this week’s Columbiana County Port Authority meeting. He said oil and gas prices drive the market, and as those prices increase, so will drilling development in the county, he told the board during a brief presentation.
The county was among the first in Ohio to experience a leasing boom in 2010 from companies wanting to drill for oil and natural gas in the region’s Utica shale reserves. Leasing activity continued until about 2013, followed by development, but all of that began to slow considerably after the increased supply resulted in a sharp decline in oil and gas prices,
“There were some things Columbiana County could not control,” such as the drop in prices, he said.
Another factor beyond the county’s control is its geology. Natural gas is divided into two categories: Dry gas, for heating homes and generating electricity, and wet gas, which can be converted for use in producing plastic and plastic-related products. Most of the county has wet gas reserves, and due to lower prices and other factors developers have focused their drilling efforts on counties with higher concentrations of dry gas, at least for now.
“The trend right now is in the south, but Columbiana County is certainly in that,” Chadsey said.
Columbiana County ranks seventh, with 133 well permits issued for 84 different locations, with 59 wells currently in production. Carroll County leads the state, with 508 well permits.
“We never really stopped drilling. Slowing doesn’t mean stopped,” he said.
The county has several other factors in its favor, starting with the gas collection and processing plant located near Kensington and the planned construction of a natural gas-powered electricity plant outside Wellsville. Chadsey said the $6 billion ethane cracker plant to be built in neighboring Beaver County, Pa., will likely have the biggest impact of all.
“You are perfectly positioned,” he told the port authority.
Once the major pipelines currently in development for the area receive final approval and become a reality, drilling activity is expected to increase because companies will have a direct line to transport product to new markets.
As for those initial five-year leases that have expired and not been renewed, Chadsey believes leasing activity will also resume once prices increase. He expects to see an uptick in activity 12 months from now.