A Fracking Bright Spot

A small industrial revival in Eastern Ohio:

Here in Ohio, in an arc stretching south from Youngstown past Canton and into the rural parts of the state where much of the natural gas is being drawn from shale deep underground, entire sectors like manufacturing, hotels, real estate and even law are being reshaped. A series of recent economic indicators, including factory hiring, shows momentum building nationally in the manufacturing sector.
New energy production is “a real game-changer in terms of the U.S. economy,” said Katy George, who leads the global manufacturing practice at McKinsey & Company, the consulting firm. “It also creates an opportunity for regions of the country to renew themselves.”.....
Vallourec, a French industrial giant, recently completed a million-square-foot plant in Youngstown to make steel pipes for the energy industry, the first mill of its kind to open here in 50 years. The facility, which cost $1.1 billion to build, will be joined next year by a smaller $80 million Vallourec plant making pipe connectors.
The change is evident in the once-moribund downtowns of northeastern Ohio cities as well as in the economic data for the state as a whole.
Ohio’s unemployment rate in July was 5.7 percent, well below the national average of 6.1 percent. That’s a sharp reversal of the situation four years ago, when unemployment in Ohio hit 10.6 percent, significantly above the country’s overall jobless rate at the time, as manufacturers here and elsewhere hemorrhaged jobs. In the Youngstown area, the jobless rate in July was 6.7 percent, compared with 13.3 percent in early 2010.
“Both Youngstown and Canton are places which experienced nothing but disinvestment for 40 years,” said Ned Hill, a professor of economic development at Cleveland State University. Now, “they’re not ghost towns anymore. You actually have to go into reverse to find a parking spot downtown.”
Youngstown and surrounding Mahoning County is hardly Silicon Valley or even Pittsburgh, which long ago bade farewell to its industrial past and sought out growth in new sectors like health care and education. Broad swaths of Youngstown look almost rural, the result of a decade-long campaign to tear down abandoned homes and factories, letting sites that were once eyesores return to nature.
And the new factories that have gone up — like Vallourec’s new complex, or a $13.2 million plant that Exterran opened in May 2013 to make oil and gas production equipment for local customers — employ only a fraction of the workers who once labored at Youngstown’s mills. Vallourec’s state-of-the-art pipe mill has about 350 workers; the old Youngstown Sheet & Tube plant that once stood on the site had a work force of 1,400 when it shut down in 1979. (more on YS&T here)

I hate to be pessimistic all the time, so at least there is some good news.  Now if only the momentum will continue for a while (not as hopeful on that).  This guy is more confident, though:

The economic impact in rural areas of Ohio is less visible but equally significant. Mostly hidden from view behind trees off a two-lane road in rural Harrison County is an Erector-setlike maze of tanks and distillation towers, one of three huge plants in the area built by Access Midstream, an energy firm based in Oklahoma City.
Over the last two years, the company has spent $1.8 billion on new infrastructure to help refine and separate the raw hydrocarbons that come out of the Utica shale.
“This is a 50-year asset,” said Scott Hallam, who oversees Access’s efforts in the Utica shale. “We wouldn’t be spending billions here if we didn’t believe that.”

We'll see how it plays out, but I think there may be more potential with shale gas than with shale oil, at least in the Marcellus and Utica shales.  Time will tell.