Because of the Utica Shale in Ohio, the state’s oil production is on the rise. Although Ohio held the rank of the largest oil producer in the U.S. in the early 1900s, its oil production was not as high as that of other states during the mid- and late-1900s, but its 2012 production numbers indicate that Ohio’s Utica Shale is on its way to making the state a large contributor to the country’s oil production again.
Ohio on the Rise
According to the Ohio Department of Natural Resources, Ohio produced 636,000 bbl and 12.8 billion cubic feet of natural gas (Bcf) in 2012. Ohio then produced 413,000 bbl in the first half of 2013, putting it 18th in the country for oil production.
Though most of the state’s current output comes from stripper wells located in eastern Ohio, big changes are expected over the course of this year. The Ohio DNR predicts that Utica Shale oil will account for 73 percent of the state’s total output over the next two years.
In 2012, a total of 215 wells were drilled in Ohio-based shale formations, with 87 of those wells in production. If production continues as it has over recent years and new drilling development permits continue to be granted, the Institute for Energy Research predicts that unconventional resources like the Utica and Marcellus shale formations will supply 82 percent of the state’s natural gas by 2015.
Hurdles for Production
The biggest challenge that producers face in oil and gas production in both the Marcellus Shale and the Utica Shale in Ohio is the development of adequate pipelines and processing plants. While Ohio’s four refineries currently process around 528,000 barrels of oil per day, it’s not enough to accommodate the rising output from the shale formations.
The Rockies Express Pipeline (REP), which helps to transport up to 200,000 decatherms per day of Utica natural gas, is also under fire. Producers in the Rocky Mountain region are seeking to have the REP reversed, and the U.S. Federal Energy Regulatory Commission is currently reviewing the case. If the reversal is granted, it could leave Ohio in need of new pipelines.
Importance of the Utica Shale in Ohio’s MarketThe Utica Shale region is known for its plethora of natural gas resources, and the bulk of new facilities and plants in the works will serve the natural gas liquids (NGL) market. A few of the facilities under way include the following:
· A $60 million pipeline from Pennant Midstream LLC. The project will add a capacity of 90,000 barrels per day and 38 miles of 12-inch piping. It will connect the Hickory Bend Cryogenic processing plant in New Middleton, Ohio, to the UEO Kensington facility in Columbia County, Ohio, and is expected to open by July of this year.
· A midstream system by MarkWest Utica EMG. This project will provide midstream support for Antero Resources, Gulfport Energy Corp., and other Utica shale producers. It will include a new cryogenic gas processing facility, which will add a capacity of 200 million cubic feet per day (MMcf/d).
· The Cadiz complex. MarkWest EMG is developing a complex in Cadiz, a town in Harrison County, Ohio. The first phase of the complex includes a cryogenic processing plant and adds a capacity of 125 MMcf/d. Phase II will launch in mid-2014 and increase capacity to 325 MMcf/d. Once completed, MarkWest’s total midstream development in the Utica Shale will encompass more than 300 miles, five processing plants, and a capacity of 1 billion cubic feet per day (bcf/d).
· A gas-to-liquids project by Pinto Energy LLC. Pinto will add a capacity of 2,800 barrels per day with a new GTL plant that is slated to open in late 2015 or early 2016.
If you or your company is interested in developing in the Marcellus or Utica Shale in Ohio, contact MAH Energy Law today. We can help you acquire the rights, titles, and other needs you may have.