Ohio’s Oil and Natural Gas Market Update – March 10, 2015

Eastern Ohio is becoming known for the natural resources lying beneath the surface of its ground – oil, natural gas, and wet gas.  Recently, Dow Chemical decided to invest $6 billion to enlarge manufacturing facilities in the United States.  This news is surprising for two reasons:

  1. Last calendar year, there was a glut of natural gas resources; and
  2. That resource glut discouraged new drilling.

And yet, despite those two factors, firms like Dow observed that U.S. natural gas production still increased by 4% last year.  Given the developing profitability of the natural gas economy even in times of excess supply, Dow has plans to restart an ethylene plant in Texas, and also in an all‑purpose propylene facility.

So what does this mean for Southeast Ohio landowners and upstream and midstream companies?  Put simply, it is not clear.  Wet gas is primarily used to produce derivative products (like the products Dow is investing in), which may mean that the market is positioned to become bullish for those sitting on wet natural gas resources.  However, Ohio’s manufacturing infrastructure still lags behind more developed plays in Texas, and must continue to develop in order for the local market to truly catch fire.

Should you have any questions about leasing your land or any other legal issue related to oil and natural gas, feel free to give me a call at (513) 852-6071 or send me an e-mail at bwfox@woodlamping.com.

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    Andrea Griffith

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