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In a small office, surrounded by photos and memorabilia of General William Custer, sits the County Auditor of Carroll County Ohio. Mr. Leroy VanHorne was born in the same town as Custer and has made a life-long hobby out of studying the life and times of the storied General. But amid discussions about the Kansas farm Custer once owned, VanHorne also discusses the most important news of the day: the impact of Utica Shale development on the Appalachian county he serves.
Carroll County OH, a sleepy rural district in the far eastern half of the state, boasts a population of 28,782, a number that hasn’t changed since the census in 2000. After years of economic stagnation and a decline of the county’s chief industry, agriculture, its residents are seeing some of the most rapid growth in personal incomes, tax revenues, businesses and traffic the county has ever seen.
Carroll County sits directly atop the Utica Shale formation and boasts the highest number of permitted gas wells in the state of Ohio. Much like south Texas, North Dakota and its Keystone State neighbors to the east, Carroll County is riding the wave of new shale oil and natural gas development that is changing the economic landscape of America.
From his desk in the county seat of Carrollton (pop. 3200) Mr. VanHorne says as early as 2010 he was working with the county commissioners to figure out how to make ends meet. But he then ticks off the improvements in the County’s budget since the shale boom began almost 2 years ago.
“Last year due to the tremendous sale of mineral rights, because a lot of people are actually selling, the money started coming in,” he said.
VanHorne says the county has a total budget at $6.5 million and he anticipates supplying the commissioners with a budget proposal of $7.3 million in the next fiscal year.
“It’s a great feeling to be able to tell the commissioners when they ask to find the money for a project, that ‘yes’ we can fund that request.
VanHorne says he expects the next few years to keep getting better. Carroll County and the Utica Shale formation in general is newer to gas development than the neighboring Marcellus formation in Pennsylvania. With energy companies like Chesapeake and REX Energy focusing on building the area’s pipeline infrastructure as well as drilling wells, the county has another year or two to go before it sees the peak of energy development and the benefits it will bring.
Forward Looking Statements
In a county that has not raised its mill levy since 1977, the energy boom has been a crucial economic driver for it and its 15 townships and 7 villages. The increasing revenue from gas well royalties, sales and property tax has allowed for long-awaited construction projects and road improvements to be green lighted and even allowed for a 3 percent pay raise for county employees, the first in several years. The unemployment rate has dropped from 16 percent in 2010, to 6.8 percent as of April this year.
“Last year we were up about a million dollars, and we could be up another million this year over last year,” said VanHorne. “For the first time I can actually give a report to the county commissioners that we should have enough money to cover everybody’s [budget] requests.”
As recently as two years ago, the prospects for Carroll County weren’t so bright. Sitting in the local cafe, County Commissioner Robert Wirkner says before the shale boom, there were no new prospects for economic development.
Before becoming a Commissioner, Wirkner served in both the Navy and the Army before settling at the FBI. During the Cold War Wirkner participated in a pilot project that hosted Russian KGB agents at the FBI academy. He served as the Chief Deputy Sheriff for the county for a number of years as well as the county Emergency Management Director. Now as a county commissioner Wirkner continues his dedication to public service. He has worked for years to ensure the rural community stayed afloat.
“There wasn’t much on the horizon to help keep the county from sinking,” he said. “There is only so much you can cut and trim before all the fat is gone. We joked that we became good at the ancient art of trying to do more with less. Then along came gas and oil, and things changed dramatically.”
Now retail, residential, and industrial development projects are seeking permits and bringing jobs and revenue back to the county. One developer is planning a 77-acre industrial park near Carrollton. Carroll County Energy LLC, a subsidiary of Advance Power Service Inc. is currently seeking permits to build a $800 million electrical generation plant that would create 500 construction jobs and 25 to 30 full time positions.
“In a town of only 3200 people, 25 to 30 jobs is a big project,” Wirkner said.
The project would help offset reductions in Ohio’s generation capacity as several coal-fired power plants in the state are set to close. American Electric Power was one of several generators in recent months to announce closures of plants in the face of new air quality regulations promulgated by the Environmental Protection Agency.
For now the county is focusing on improving its water and sewer infrastructure and working on agreements to help provide the proposed Carroll County Electric plant with the 200,000 gallons of water per day it will need to operate. Carrollton is working on a shared agreement with the town of Malvern to supply the plant with the needed water.
The county is also working with the state of Ohio to ensure proper management of water resources overall as energy development in the area continues to grow.
“We are focused on proper stewardship of our water resources,” said Wirkner. “We are working to discourage tapping the local aquifer and instead use more surface water from the Muskingham Water Conservancy District.”
He also says the development of the “midstream” or pipeline industry is creating additional opportunities beyond gas drilling activities.
“Pipelines have a small footprint but create a lot of jobs.”
Midstream operations expect to grow as the energy industry in the area matures and the need to transport natural gas to market increases. Additional gas production will increase the need for pipeline infrastructure and local workers say they are ready to help build it.
Boon for Small Business
But the good fortune doesn’t stop at the courthouse. Small businesses across the county have been seeing an increase in revenue. The laundromat and dry cleaner had to hire new employees and lengthen their business hours. The local YMCA is operating in the black for the first time since it opened. The local hardware store is seeing the benefits as well.
“Everything was running good, then the recession hit and things got a little slim,” said Kim Mills, owner and manager of Carrollton Ace Hardware. “Now with the oil and gas companies coming in we are back up to where we were before the recession.”
The store recently completed a renovation and addition of floor space to accommodate new stock and new lines of business. She has hired additional employees and used the bump in business to invest in more stock. One employee spends 100% of his time servicing the needs of gas companies.
Ron Rocco operates a custom parts and fabrication shop near Minerva. He provides custom parts for school buses around the country and services school districts from Maine to Texas. Ron’s seen a large increase in business as local school districts increase their maintenance budgets in response to increased tax revenue. He is also creating prototype parts for local gas companies and drilling rig operators and expects that side of his business to take off in the months to come.
Rocco currently employs four people and is looking for another. He says with the expansion in the area he has a hard time finding employees, but he believes the gas boom has provided an opening for small businesses in the area to grow and compete.
“The bigger [parts] companies were already busy, so it lets us little guys get into a business we never would have had the opportunity for before,” he says of the gas industry. “We went from trying to find work to having too much, so it’s a good thing.”
With a bump in new residents and an increase in personal incomes, Rocco’s mother Alicia is seeing an increase in her store’s sales, too. She operates Natural Approach Farm Store, a natural health and nutritional supplement retail shop near Minerva. She’s also an integrated health practitioner and alpaca breeder.
“People call or stop by on a regular basis now,” she says. “We provide products and services that you can’t find anywhere else in the county. They like to be able to get these things near their home rather than drive for an hour.”
Energy and Education
As opportunities for employment in the county grow, Carroll County’s educators are working to ensure their students are prepared to step into the workforce with the skills and knowledge needed to succeed. Carrollton Exempted Village Schools Superintendent David Quattrochi is implementing an aggressive Science, Technology, Engineering and Mathematics (STEM) program and increasing the district’s coordination with local area technical schools. The Energy Resource Dynamics program will prepare students for college in subjects like structural engineering, agriculture and industrial power, natural resources, environmental science, and so forth. It will also include an adult education component to provide additional skills training for local workers and non-traditional students.
Quattrochi recently initiated a dual enrollment program with Stark State College which allows High School students to get college credit for their High School coursework. The program also incorporates a dual-track curriculum with an energy education focus where students can elect to choose new classes like pre-engineering and geology. These enrollment programs ensure that students who want to go directly into the workforce can do so with the proper training and professional certifications.
Like many rural communities, students were faced with low job prospects and had to leave the area in search of better paying jobs. But Quattrichi says the shale boom has changed all that.
“Our goal is to give Carroll County kids the opportunity to stay in the county if they want. To be able to get good paying jobs here at home,” he said.
The school district recently sold leases on district-owned land for six gas wells to be drilled in the coming months. The leases will not only provide a funding boost, but will also be a learning opportunity. The district plans to install an observation lab overlooking the well pads that will allow students to see first-hand how oil and gas drilling works. The labs will also provide additional classroom space as the district expands.
As the energy industry in Ohio and across the nation grows, companies increasingly find themselves with a shortage of students with the technical skills necessary to step into oil and gas related jobs and careers. The industry grew at a rate of 63 percent in 2012 and at the same time, 64 percent of all companies reported concern over filling skilled job positions in the coming year. Human resources departments are working to increase compensation packages in an effort to attract more talent. This creates an opening for educators like Quattrochi.
“It’s not so much that we are trying to push our kids into the energy or the resource field, because the classes that we are offering can be beneficial for any student, especially those going to college.”
Even still, demand for the program is high among local parents and enrollment in the district is increasing.
Protecting Farmers, Growing Flocks
Folks in Carroll County overwhelmingly support energy development, but some were initially hesitant that the development would affect the local agriculture industry. When asked, most people will mention that they were worried about farmers selling out and moving away after selling gas leases on their land.
“We were all worried about losing our farmers, that was the one big worry,” explains Carol McIntire, editor of the Free Press Standard.
But as local pastor Frank Leghart explains, agriculture in the county is stronger than ever. Even as farm incomes from gas drilling have increased, farmers have reinvested in their farms and are growing stronger and stronger.
“Our farmers didn’t end up leaving. They stayed and invested more and more money into the community and into their farms. They are as strong as they have been in a long time,” he said. “I see now where there were farms ready to go under, but now with all the signing bonuses and lease income, they’ve got new tractors; it literally saved farms.”
That improvement is trickling down to the rest of the local farm economy. Equipment dealers are back ordered on inventory and prices at the local livestock barn are at all-time highs. The Carroll County Fair and Junior Livestock auction saw total sales of $304,872 — nearly $100,000 more than last year, and set an all-time high record.
Pastor Leghart also says he’s seen his church grow over the past few years. He started the congregation in 2003 with seven parishioners and now counts around 120 people as members. He says energy development has afforded him the opportunity to minister to many new people.
“We see new faces in church almost every week and I go out to rig sites all the time to minister to the rig workers and pray for their safety,” he said.
– A project of Consumer Energy Alliance