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Home / Articles / News / Campus NEWS /  Database aims to help regional companies catch oil/gas wave
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Wednesday, September 5,2012

Database aims to help regional companies catch oil/gas wave

By Jim Phillips
Smith_Concrete
Photo Credits: Photo by Kevin Riddell
Photo Caption: Matt Holcomb, a driver for Smith Concrete, climbs down the side of his truck after washing it Aug. 27, at the Smith Concrete facility on Hebbardsville Road.

A new database put together at Ohio University's Voinovich Center of Leadership and Public Affairs could help regional businesses – and eventually, firms statewide – gain some economic benefit from the growing boom in deep-shale oil-and-gas drilling.

The online database provides the names and profiles of hundreds of area companies that can provide materials, or operational or support services, to the companies that come into southern Ohio to drill for oil and gas in the shale beds that underlie the state.

The website was launched only about four months ago, but its creators are already thinking about expanding it to cover the whole state, and perhaps eventually the entire country.

"We had always planned on having a statewide coverage," said Scott Miller, director of energy and environmental programs at the Voinovich School.

The database is part of a wider effort to help ensure that Ohio's workers and companies derive their share of economic benefit from any oil-and-gas drilling boom in the state. (The boom is already underway in some eastern counties to the north of Athens, but is only starting to get here in the form of a lot of leasing activity and some exploratory drilling activity.)

In early August, for example, Energy In Depth, an industry group, unveiled a new online jobs portal, which according to EID is "designed to connect job seekers with companies and vendors developing oil and natural gas in the Utica shale, as well as the supply chain that supports those companies."

The Shale Supply Chain Database, on the other hand, is meant to hook up drilling companies with in-state firms that can provide them with materials, or operations or support services.

"It's not a job service," Miller explained. "It is focused on business-to-business connectivity."

Those who applaud the prospect of a shale drilling boom in Ohio point to the potential benefits in the form of energy independence and, especially, economic growth. Some have questioned, however, whether much of that benefit may flow to firms and workers from states in the heartland of the oil-and-gas industry, such as Texas, Louisiana and Oklahoma.

"For the most part, the industry is run out of Tulsa and Dallas and Baton Rouge," Miller acknowledged. The idea behind the new database, he said, is to hook up out-of-state drilling companies with Ohio firms that can provide the various supplies and services needed to operate a drilling rig.

While drilling companies may need to use experienced workers and suppliers from the oil-and-gas heartland to handle the actual drilling, Miller said, they will also have a range of needs that can be met just as well, and probably cheaper, by companies in the state where they're drilling.

To hydraulically fracture shale requires sand, for example, and a driller could probably save money by buying that from a local supplier, Miller suggested.

"They don't much care who the supplier is for the sand," he said.

A visitor to the website can search by type of firm and by geographic area. For example, Miller explained, one can pick a well site, then do a search over a defined radius for a particular type of company.

A drilling company, for instance, might need concrete for casings at a well site; it could select the well site, then query the database, "Who are all the concrete companies within 25 miles of this site?"

Because of the advantage of being nearby for this type of trade, Miller predicted, "in the next three to five years, it's going to be the state suppliers who really seize the opportunity."

He cited the Ariel Compressor company, based in Mt. Vernon, Ohio, which describes itself on its website as the world's largest manufacturer of a type of compressor used by the oil and gas industry. "They've been making those for 40 years," he noted.

WHEN THE NEWS SPOKE with Miller last month, around 1,000 companies had already put profiles into the database; 27 companies in Athens County show up on the site's interactive map.

Some of the Athens County firms taking part may see only narrow opportunities to get business from the oil-and-gas industry; a source at Bedrock Rentals in Athens, for example, said that the company's main opportunity would probably be providing lighting towers for nighttime drilling work.

Others may see broader prospects. There's Smith Concrete, for instance, on Hebbardsville Road southwest of Athens; the company's operations manager, Rich Kemper, said he believes it could certainly grab some business if drilling picks up in the area.

"We have the potential, especially the aggregate (gravel) side of our business," Kemper predicted. "And on the concrete side of it, there's potential for the drilling rigs."

Originally, because the database project was funded by a grant from the U.S. Department of Agriculture aimed at helping rural counties with certain socioeconomic criteria, it could cover only 12 counties in southeast Ohio including Athens. Since that grant ran out in June, however, Miller and his colleagues, with support from an industry group, are eyeing the prospects of expanding the database to the state as a whole.

The Ohio Shale Coalition, whose website says its goal is to "maximize the jobs and economic potential of shale gas and affordable energy production in Ohio," has indicated it may be willing to take over funding of the project, which Miller estimated will cost about $100,000 annually, mainly in staff time, to keep running.

"They are interested in become the sponsor to take this statewide," Miller reported. "We'll be taking this to all 88 counties eventually."

Coalition Executive Director Linda Woggon confirmed that the group wants to help expand the database to cover all of Ohio.

"We will help to market it on a statewide basis," Woggon explained, and will also partner with the Voinovich School to provide training events for companies that may need more expertise or certifications to attract business from big players in the oil-and-gas business.

"We want to make sure that Ohio businesses have the chance to take advantage of these opportunities as well (as out-of-state firms)," Woggon said.

She noted that "a lot of times the producers come in, and they have existing supply chains from the state they're coming from." The Coalition hopes that by pushing the database, it can help these big producers make the transition to local suppliers, benefiting both parties in the process.

And for those who have concerns about the environmental impact of fracking and the continued use of fossil fuels, a bit of good news: Miller says he's already thinking about the potential for similar supply-chain databases for the wind- and solar-energy fields.

Miller said after just a few months of operation, he doesn't have much data yet on how well the database is working to put drillers and local suppliers together.

"We haven't had that kind of feedback yet," he acknowledged. "What I am hearing from people is, 'This could be very useful.'"

 

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