Ohio’s natural gas production jumps

Ohio’s natural gas production nearly doubled from 2012 to 2013 because of increasing activity in the Utica shale coupled with new midstream infrastructure, state officials said Wednesday.

The Ohio Department of Natural Resources released data for 352 horizontal shale wells that reported production in 2013. The wells drilled in the Utica and Marcellus shale produced 3.6 million barrels of oil and 100 million cubic feet of gas, or mcf. By comparison, 85 horizontal shale wells one year earlier produced just less than 636,000 barrels of oil and less than 13 million mcf.

On average, Ohio’s oil and gas production increased approximately 65 percent quarter to quarter from first quarter 2013 to first quarter 2014, ODNR officials said.

“Ohio’s oil and gas industry is growing and moving our state toward energy independence,” said ODNR Director James Zehringer. “At the same time, we have updated our laws and increased our staff to provide Ohioans the proper protections as the industry continues to grow.”

Rick Simmers, ODNR’s chief of the division of Oil and Gas, described the Utica Shale Play as mainly a gas formation, unlike other U.S. shale plays like North Dakota’s Bakken that is primarily an oil producer. The wet gas makes Ohio’s Utica Shale very valuable because it is processed and converted to products like butane, ethane and propane.

Development of infrastructure, processing plants, supply chain and use of the wet-gas products in manufacturing all lead to jobs for Ohioans, said JobsOhio Senior Managing Director David Mustine.

“Because of the shale activity, we have a competitive price advantage over an extended period of time. Companies can buy natural gas less expensively here than they can on the Gulf Coast,” Mustine said.

The production growth depends heavily on the development of the midstream infrastructure needed to transfer the resources to market.

In a little more than 24 months, the new industry developed 11 processing facilities and miles of new pipelines. Companies have spent or committed more than $6 billion on midstream infrastructure.

ODNR projects all oil and gas wells in Ohio produced 8 million barrels of oil and 171 billion cubic feet of gas in 2013. Compared to 2012, Ohio’s total oil production increased by 62 percent and natural gas production increased by 97 percent.

The percentage increase in natural gas production is the largest in Ohio history, and the total production is the fourth highest annual total in state history.

ODNR also on Wednesday released production data for the first quarter of 2014. A total of 418 wells reported production of 1.9 million barrels of oil and 67 billion cubic feet of gas.