From The Statehouse 2005 No. 25
by Jennifer Garrison
Oct. 1, 2005
From the Statehouse Article 25
For the last two (2) weeks the Public Utilities and Energy Committee in the Ohio House of Representatives have been holding hearings to gather information regarding the energy crisis. The Committee heard testimony from officers of Dominion East, Columbia Gas, Cincinnati Gas and Electric, Vecren Energy Delivery of OH, the Oil and Gas Association, the Public Utilities Commission of Ohio, the Ohio Consumers Counsel and other industrial users.
All parties stated, high natural gas prices are a national issue and must be resolved on the national level. However, the energy industry was looking for specific assistance from the State. High natural gas prices are a problem for the utilities as well as their customers because high prices anger customers and reduce consumption which reduces a utilities profit and good will.
Ohio is the 7th largest consumer of natural gas in the United States and 17th in production of natural gas. We rely heavily on the natural gas from the Gulf Coast region and sadly the story hasn’t all been told about the impact to the drilling rigs in that region yet.
Basically, there is concern that affordable supply will not be available unless the nation and the state is proactive in its response to this crisis. One, remedy on a state level would be to develop tax incentives for use of alternative renewable energy sources. Another would be to allow drilling for oil and gas to occur under state lands.
On September 20, 2005, the Department of Energy released a report stating, the Appalachian Basin is the largest onshore basin in the United States. The U.S. Geological Survey recently released a survey assessing the undiscovered Appalachian Basin resource base. The Survey concluded that within the Basin there was over 70 trillion cubic feet of natural gas, 54 million barrels of oil and 872 million barrels of natural gas liquids remaining to be found and produced. To help put this in perspective- if 30% of the Appalachian resource was recoverable, that would amount to 50% of the published proved oil reserves available in Alaska.
One interesting fact I learned is- because of the local production we have here in eastern Ohio, Ohio citizens tend not to experience the extreme price swings. According the Oil and Gas Association, 2 years ago Dominion East and Ohio Producers agreed to a production enhancement program which has been very successful in increasing the locally produced supplies of natural gas by 9%. Since local natural gas production does not have interstate delivery costs it is cheaper for the customer.
During these hearing the energy industry requested we open up state lands and parks for oil and gas drilling. Today drilling for oil and gas wells on state lands is prohibited. The testimony of the Vice President of the Oil and Gas Association revealed a recent petroleum engineering review of Salt Fork Park suggests tremendous natural gas potential. I look forward to learning the results of this study and determining the economic impact for the region.
The Oil and Gas industry is a major industry in southeast Ohio and with the price of natural gas rising, it is important for the legislature to find ways to insure Ohioans have an affordable supply of one our best regional resources. This could be very good for economic development.
As always, I look forward to hearing from you about this important issue for the state and this region.
You can reach Jennifer Garrison at her Columbus office at 614-644-8728 or in the district at 740-373-2414 or by e-mail at jennifer@jennifergarrison.com. Her website is www.jennifergarrison.com