In Ohio we are getting a first-hand look at the ripple effect in the economy when America’s energy resources are tapped — and it has been a real economic boon.
As I’ve mentioned before, eastern Ohio is home to the Utica shale formation, an incredibly deep layer of rock that apparently is a rich repository of natural gas, oil, and other highly valued “wet gases.” Drilling wells requires steel pipe, and because the Utica shale formation is so deep underground it requires lots and lots of pipe. As this New York Times article reports, the need for pipe caused by the resurgence in natural gas drilling in the continental United States has helped to fuel a resurgence in the Ohio steel industry, which has seen expanding steel mills and the hiring of new workers to handle the skyrocketing demand.
The effects don’t stop there. The owners of the property on which the wells are being drilled have been paid for the privilege and therefore have more money to put into their local economies. The fracking method used to extract the gas and oil requires lots of water, so trucking companies have expanded their tanker fleets to meet the demand. And all of the truck drivers, oil drillers, geologists, and drilling engineers who work in Ohio’s oil patch have to eat and sleep and work, which means that hotels, motels, and restaurants in the area are busier than they’ve been in years and the demand for office space has increased, too.
In short, Ohio’s economy demonstrates the good things that can happen when energy resources are located and tapped. As the Ohio story shows, developing our oil and gas resources — a proven commodity with a proven market that doesn’t require government subsidies or wasteful stimulus spending — is a sure means for an economy to grow its way out of this unending recession.
Thanks to Richard for sending me the linked article.