Ancillary industries could help growth
ZANESVILLE — As drillers tap the natural gas reserves beneath Ohio’s easternmost counties, community leaders to the west hope to pump some of those profits into their own economies by developing ancillary industries.
State Rep. Adam Holmes, R-Nashport, met recently with representatives of JobsOhio and the Appalachian Partnership for Economic Growth to discuss ways that counties adjacent to the Marcellus and Utica shale regions can capitalize on the activity that is taking place there. At the Zanesville meeting, Holmes said counties including Muskingum — which lies just west of Guernsey County and within 50 miles of many parts of Noble, Monroe, Harrison and Belmont counties where much of the drilling is taking place — are ideal locations for support services related to the industry.
Holmes suggested that because of its central location less than an hour east of the Columbus and along Interstate 70, Muskingum County is a suitable spot for trucking companies to set up maintenance and repair facilities.
He said the location is also ideal for pipe yards and manufacturing and storage for pipelining companies.
He pointed out that the flatter terrain of Muskingum County, as opposed to the rolling hills of the more eastern counties, means it is easier to construct large buildings and facilities there.
He referred to his legislative District 97, which includes Guernsey and Muskingum counties, as a “downstream area” in connection with the industry.
Dana Saucier, vice president and head of economic development for JobsOhio, explained that drilling and production are “upstream” operations, while “midstream” activities include processing the hydrocarbons that are drawn from the ground and transporting them to market, often by pipeline.
Downstream operations include those that use the natural gas and related products such as ethane and propane in manufacturing, producing plastics, chemicals, electricity, carpets and textiles, medical devices and more.
Saucier said during the past nine years, the gas and oil industry has invested $75 billion in the Buckeye State, and he anticipates much more investment in the future.
“Now we think the best is yet to come,” he said. “A lot of jobs will come. (Downstream operations) are more people-intensive. Workers need to be highly trained.”
Matt Cybulski, sector director for JobsOhio, called Harrison County the “midstream hub” of the state. He said companies such as MarkWest Energy have invested $12 billion to $15 billion in fractionation plants and other processing facilities there over the past six to seven years.
He said as natural gas-fueled power plants increase in number across the region — and if PTT Global Chemical America and Daelim Industrial Co. opt to build a proposed ethane cracker plant at Dilles Bottom in Belmont County — such investment will continue to grow.
Holmes said it is a natural progression for ancillary industries and “support clusters” to rise up in areas surrounding regions where a natural resource boom is occurring. He said as the number of related jobs increases, so will the need for restaurants, gas stations, housing and more.
“It will change the tax base as the demand for services increases,” he said.
He cited Peterbilt as one company that sees the potential of setting up shop in Muskingum County.
He said the truck manufacturer has a warehouse and dealership there, including a maintenance and repair facility. And, he said, it is even making a specialized hitch for use on the rough terrain of gas and oil country.
Zanesville is becoming something of a transportation hub, with Freightliner and Kenworth also dealing in big rigs there. Situated just about 11 hours from the East Coast, many over-the-road drivers departing from Zanesville can reach some port cities within a single day.
Cybulski pointed out that a regional focus is important, since plenty of related gas and oil development also is taking place in Pennsylvania and West Virginia.
“So while we want to win projects within Ohio, we realize the regional impact,” Cybulski said. “We can have more success together.”