Ohio Shale Energy Development: Assessing the Economic Opportunities and Risks

Ohio Shale Energy Development 2016-08-11 #2The recent technological advancement in horizontal hydraulic fracturing has unlocked oil and gas resources from shale formations once thought to be uneconomical to recover. According to an article by the U.S. DOE Energy Information Administration, “As a result of growth in production, domestic production is soon expected to surpass domestic consumption of natural gas, and by 2018 the United States becomes a net exporter of natural gas for the first time since the 1950s.”[1]  Ohio is a major contributor to domestic oil and gas development as intense production from the Marcellus and Utica Shale formations continue to expand.

At the local level, oil and gas development can create a boomtown scenario for communities who experience an increase in population, wealth and economic activity due to the sudden shock. Energy-based economies often experience a boom-bust cycle that follows the rise and fall of energy prices. A high performing energy sector often crowds out other sectors from additional growth, promoting a highly specialized regional economy that is dependent on the performance of the energy sector. This contributes to the volatility of the local economy by limiting economic diversification, and thereby impacting long-term economic growth.

Ohio Shale Energy Development 2016-08-11OSU Extension has collaborated with faculty researchers in OSU’s department of Agricultural, Environmental, and Development Economics and the School of Environment and Natural Resources to develop resources that explain how oil and gas development can affect the social, economic, and environmental fabric of a community. A recently published fact sheet series titled, “Shale Energy Development Economic Impact Analysis” is based on the original research from the project “Maximizing the Gains of Old and New Energy Development for America’s Rural Communities.” The materials summarize the project’s research to inform the reader of economic impacts related to energy development.

  1. Ohio Energy Trends: Comparing Old And New Energy Development
  2. Characteristics Of A Boomtown
  3. Contributing Factors To A Boomtown Bust
  4. Developing A Model To Measure Economic Change In An Energy Economy
  5. Local Economic Development Strategies For Energy Boomtowns
  6. Community Planning Strategies For Energy Boomtowns

Readers are provided a background on energy development in Ohio, an investigation into the structural changes that local economies experience when faced with oil and gas development, and planning strategies that interested community stakeholders can employ to nurture long-term community vitality.

For more information, visit Ohioline to review the fact sheet series or contact Eric Romich.

Eric Romich is an Assistant Professor and Ohio State University Extension Field Specialist for Energy Development.


[1] United States Department of Energy, Energy Information Administration (USDOE/EIA) . (2016, June). Most natural gas production growth is expected to come from shale gas and tight oil plays. Retrieved from EIA Today In Energy: http://www.eia.gov/todayinenergy/detail.cfm?id=26552

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