Drilling declines in Carroll County, but economic development continuesJanuary 20, 2016
A single rig, drilling on a snow-crusted hill. That’s what $30 oil and $2 natural gas look like in Carroll County, the most-drilled part of eastern Ohio’s Utica Shale region.
A single rig, drilling on a snow-crusted hill.
That’s what $30 oil and $2 natural gas look like in Carroll County, the most-drilled part of eastern Ohio’s Utica Shale region.
Since shale exploration and fracking began in late 2010, no county has been drilled more than Carroll. Oil and natural gas flow from 392 wells, accounting for one-third of the producing Utica wells in the state.
A couple of years ago, you could have stood on a ridge in one of Carroll’s southern townships and counted the rigs like giant pins in a map.
An industry database says there are two rigs in the county. But last week, a Nomac rig on a Chesapeake well near Leesville appeared to be the only one actively drilling. As oil prices scrape 12-year lows, no one knows when drilling will rebound from the slump that started in late 2014.
Despite the slowdown, Carroll’s economy has not retreated to its pre-drilling days.
Unemployment is down. Bed-tax and income-tax collections are up. An $899 million power plant is under construction.
“Are we better off than we were four years ago? Yes,” said Amy Rutledge, executive director of the Carroll County Chamber of Commerce.
BY THE NUMBERS
Ohio started 2015 with 49 Utica rigs. A year later, the number has dwindled to 14, according to the Ohio Department of Natural Resources.
Compounding the price-driven slowdown is a general shift of Utica drilling to counties south and east of Carroll. Last year, Carroll added 44 Utica well permits, about half the number of new permits granted by ODNR in Belmont and Monroe counties.
That’s not to say the oil and gas industry has left Carroll. Brine trucks and tankers roll through the middle of Carrollton. Oversize loads still crawl over hilly back roads. But not in numbers approaching past years.
Yet less drilling hasn’t killed economic activity:
• The county collected $3.5 million in sales tax last year, 8 percent less than in 2014, but more than $1 million above pre-drilling totals.
• Carroll’s bed-tax collection grew 13 percent in 2015 to almost $176,000 last year as new hotels opened.
• The unemployment rate through the first eleven months of 2015 averaged 5.7 percent, down from 6.1 percent the year before.
• Income-tax collections in Carrollton last year nudged up 1 percent from 2014.
County commissioners have been conservative in planning this year’s budget, and are keeping close watch on whether the gas and oil industry recovers.
“We have definitely seen a downturn, but we still have a lot of interest from businesses because they’ve been telling us, and I think they know more than we do, that this isn’t the end and we haven’t reached the peak yet,” said Tait Carter, assistant county economic development director.
About a mile north of Carrollton on state Route 9, a tower crane looms over former farmland where Advanced Power is building its new Carroll County Energy power plant.
Without the power plant, the local economy would be down even more, Rutledge said.
The 700-megawatt plant will burn natural gas to make electricity. The project is expected to employ up to 700 workers during construction, and 21 full-time workers when it starts running in December 2017.
Closer to the village on Route 9, workers are building Centreville Village of Carrollton, an assisted living facility expected to employ 55 workers.
And the county continues to work on a $6 million project to extend water and sewer lines for four miles along state Route 43 between Arrow and Lemon roads.
If the county gets needed grant money, it plans to start building the water and sewer lines during the first part of 2018, Carter said.
Bryce Custer, a real estate adviser with NAI Spring, said a lot of companies are waiting on the sidelines to see what happens with the water and sewer project.
While some oil and gas companies are moving to Belmont County, others are still coming to Carroll or looking to expand within the county because of Carroll’s position in the northern part of the Utica region, he said.
Additionally, the area has abundant natural gas and electricity, making it an attractive location for manufacturers, and retail developers have expressed interest.
“The recipe is right. It’s just a matter of time,” Custer said. “Give the area another two to three years to mature and I think it’s going to get pretty exciting.”
Mideast politics. International oil markets. The Chinese economy. Currency values.
Global events will determine a lot of what happens in this county of 28,000 residents over the next year.
“Every article that you read, you get a different perspective,” said Jessica Clarke, general manager of Candlewood Suites in Carrollton.
The last story she read didn’t predict a rebound any time soon.
The 100-room Candlewood Suites opened in Carrollton a year ago. The hotel caters to extended-stay business travelers.
Clarke said business started to decline during the third quarter of last year as some drillers stopped working in the area. But activity rebounded a bit in November and December, a trend that has continued so far in 2016.
“We’re doing OK,” she said, but she has no idea what will happen in the next 12 months except that drillers have said they will continue to cut back, including on travel, until prices improve.
“We have to understand it’s going to be a roller coaster,” said Clarke, a 19-year veteran of the hotel industry. “We’re going to have our highs and we’re going to have our lows. And we may not know when the next high or the next low is coming, but we have to position ourselves in a way that we can ride out whichever upswing or downswing we’re on.”
Rutledge, the chamber of commerce director, said she expects 2016 to be slower for drillers than last year, “but if something would happen where suddenly the price of oil goes back up, they’ll take off again.”
From Times Reporter | January 19, 2016