Technological advances plus increased reserve estimates plus limited environmental regulation plus job friendly state government means increased drilling for natural gas in the Ohio region of the Marcellus Shale naural gas and oil deposits:
For many residents of this northeast Ohio hamlet, the oil bonanza began with a knock at the door. City Hall received a fax.
Spit from that machine last summer was a mineral rights lease offer -- just like those being hand-delivered to homeowners -- from oil and gas explorer Chesapeake Energy Corp. (CHK). In the subsequent months Chesapeake's oil-field leasing agents swarmed the region, laying claim to what the company and others say may be one of the last big unconventional oil discoveries in the U.S.
"It was a mad rush," said Mayor Rob Donham. Windham eventually sold Chesapeake the right to drill underneath 100 acres that hold the town's municipal buildings and ball fields for $55,000 -- enough to buy two new police cars -- and the prospect of decades of oil royalties.
Ohio is bracing for an oil boom as companies, led by Chesapeake, gobble up leases covering millions of acres in the eastern half of the state. While no one's yet proven the commercial potential of the Utica formation, an oil-rich layer of rock that underlies this area, some believe it will yield crude on par with the largest shale reservoirs in the U.S. and spark a Rust Belt resurrection.
Oil-drilling in Ohio's Utica, along with natural-gas drilling in the Marcellus shale there "could be a godsend" to the hard-scrabble region, Gov. John Kasich said in a written statement.
The budding boom here is the latest version of a story that has developed across North America in the last decade, as producers have figured out how to crack open deeply buried energy-bearing rocks, first unleashing floods of natural gas and later transferring the techniques to oil extraction. Surging global demand for crude and low natural gas prices have led to the highest level of oil drilling activity the U.S. has seen in more than 20 years.
Kasich has appointed a former oilfield service executive, David Mustine, to head Ohio's natural resources department. Among that agency's tasks: studying whether drilling is allowed on state parks. With an unemployment rate of 9.6% and a projected two-year budget deficit of $8 billion, "everything is on the table," Mustine said.
