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Conference discusses future of shale production in Ohio

June 27, 2013

By Christina Sanders

On June 17-18 company leaders, distinguished scientists, educators, landowners and researchers all gathered in Severance Hall on the campus of Case Western Reserve University to discuss the future of the business of gas and energy.

Sponsored by the National Academy of Engineers, Case Western Reserve University, Cleveland State University and Kent State University, the two-day conference featured three to five presenter sessions broken into talking point categories.

After an introduction there were opening remarks by representatives from conference sponsors and other individuals involved with the event such as U.S. Senator Rob Portman and Barbara Snyder, president of Case Western Reserve University, among others.

The conference kicked off with a session dedicated to discussing the science and technology of the fracking and oil industry.

Other sessions included talks regarding the impact on the economy, environment, health, security, societal impact, energy security, and the view of the venture from different industries.

Each presenter was given roughly 20 minutes to present facts, figures, research conclusions and related material to audience members, who sat in the auditorium seats intently listening.

They were matching the energy jargon with words that they hear everyday, trying to make sense of the evolving technological world around them.

Shale – a word Ohioans have been starting to grow accustomed to hearing – is thought of and being marketed as the future of the gas and energy industry in places rich in Marcellus shale such as Northeast Ohio.

As residents of one of the states hit hardest by the economic recession, Ohioans are looking at the new and sudden interest by major natural gas and energy companies with cautious optimism.

According to various presenters, the natural gas trapped in Marcellus shale rocks in Northeast Ohio and surrounding Midwest areas is so great that there is enough to power the entire East Coast of the United States for 50 years. The amount of natural gas available in the United States is not great enough to eliminate imported oil, but it is certainly enough to be “disruptive."

Disruptive, a word that was used in almost every presentation, describes natural shale gas' reshaping of the gas and energy industry.

Randy Valencia, production-engineering advisor at Apache Corporation, a natural gas drilling company headquartered in the Southwest of the United States, further defined the term.

“It is changing the way of thinking and has the ability to have an impact over existing economies,” Valencia said.

Drilling for shale gas and other natural gas has greatly increased in recent years due to advances in drilling technology.

“Before, you could only drill down vertically so you weren’t able to get all the natural gas without drilling another well, and drilling another well,” said Steve Percy, retired BP America CEO and current interim dean of Cleveland State University's Monte Ahuja College of Business.

“Now there is a device that allows you to drill down and then horizontally on both sides to get all the gas without drilling multiple wells.”

Percy was called upon to share his expertise as he has extensive experience in the oil industry as an engineer and the CEO of BP America. Also, as interim dean he represented co-sponsor Cleveland State at the conference.

Although many assume that natural gas is the answer to the high price of gas in the U.S., engineering executives feel that there are still many complications that surround a complete conversion to natural gas.

“Right now there isn’t much of a difference in the price of natural gas and oil,” Valencia said.

“It would actually be less economic to use natural gas because there is only one commercial fueling station in the entire United States, and it also takes a long time to refuel using natural gas.”

Recently there has been a near-constant outpouring of information about the benefits of shale gas. From websites and television commercials to this conference, drilling companies have been going out of their way to assure residents that it is not destructive.

Websites boast that this recent interest will not only create jobs but createlong-term careers that “you can raise a family on”.

Landowners and residents are not only concerned about the environmental and health effects but also the effects that drilling and hydrofracking will have on the economy.

“There will be some benefit,” Percy said. He feels that the recent interest is good for the Cleveland economy, which is taking a new direction.“Some resources will create jobs, and there will be an increase in royalties that people receive for use of their land. Jobs will be created by this industry.

A lot of consulting, legal and sourcing jobs will be sourced through Cleveland.

“There has been lots of revitalization efforts. There are strong corporations that are doing pretty well. A lot of people are starting to live downtown.

A lot of entrepreneurship in the city and the industry in Cleveland does require energy.”

During the breaks a few landowners discussed their concerns regarding new leases that were being signed by some of their neighbors that guarantee more royalties for drilling on their land.

But there are clauses in those new leases that disabled landowners from receiving further compensation or gave them no compensation at all.

They felt that their issues were not being raised or discussed at either this conference or at similar conferences held in the state.