STEUBENVILLE - Ken Perkins has seen first-hand what shale oil and gas development means to the Upper Ohio Valley.
Perkins, president of Tri-State Financial Services, said landowners who've struggled their entire lives to keep food on their table and pay their bills have more money now than they'd ever dreamed of, thanks to checks from energy companies leasing their oil and gas rights.
"Let me put it this way," he said. "This past week the smallest check we saw was $324,000. The largest was $1.4 million. We're starting to see money pour into the community, we're seeing checks getting cut and people receiving their money. It's going to have a nice trickle-down effect in the local economy."
Vehicles sales - particularly truck sales - are up, as are the sale of farm implements. People are looking for ways to minimize the tax hit.
"It's been a great boost for the valley," said Dean Boring, co-owner of Bloomingdale-based Kuester Implement Co. "It's definitely been a bright spot for us. It brings a retail excitement to every business in the valley."
And it's only the beginning: In addition to hefty lease checks, once production begins in earnest landowners will start seeing royalty payments. There'll be thousands of new jobs created in the community, which means more money being spent on food, lodging and entertainment.
"To see money getting back in the community is going to be a big plus, I think," Perkins said. "The only worry I have, really, is that they're getting a large lease payment up front because of the land - they call it bonus money. Basically, it's the five years of the lease all paid at once - then their royalties start once the wells are drilled and producing gas. Normally, the landowner gets 50 percent of the total income of the well in the first five years, then it starts to wane as the well is depleted over the next 15 or 20 years. My fear is people won't budget properly, that people will adjust their way of life based on that income but it won't be there forever."
Perkins said the trickle-down effect is already being felt in the retail community: Property owners scoring those big lease checks scrambling to reduce their tax liability are taking advantage of tax incentives and purchasing new vehicles. Farm equipment also is selling fast as landowners seek to reduce their tax exposure.
"It's like I was telling some folks the other day," Perkins said. "Everybody always says 'if' shale oil and gas comes. It's no longer if. It's happening, it's here. I've got a client from Toledo with an Ohio CAT dealership now in Cadiz those are the types of things we're going to see coming in, and it's just going to continue to grow and build. There's going to be an influx of money and people - they're going to need restaurants to eat at and hotels to stay at. It's no longer speculation, it's here. Companies aren't investing that kind of money to lease land based on speculation. It's like when you were a kid and the toy catalog came in the mail in September and you handed it to Mom and told her what you wanted. It's the same here - our wish list is starting to fill up."