‘Trickle Down’: Other Sectors, Small Businesses Grow With Ohio Gas Industry

Kelly Moore says her story is much like that of many other regional entrepreneurs.
She and her husband are independent owners of three Napa Auto Parts stores. Auto parts stare known to many as places to get windshield wipers or gear up for a DIY oil change.
They offer that, although their downtown Zanesville shop operates with about 80% from commercial revenue. Moore has largely contributed that to some of gas industry companies, like Halliburton.
But it’s not just the gas well service company buying parts to service vehicles and semis. Those 500 employees may want to fix their own cars too. The person repairing air conditioning at the massive facilities needs to keep his work truck up to snuff, and oil well servicing requires heavy machinery that needs to be purchased somewhere.
“It’s that trickle down that they talk about, and it’s had a nice effect, not just on my business,” Moore said.
As the world shifts away from fossil fuel dependence due to environmental impact and climate change, local entrepreneurs say the jobs created weren’t limited to those who hold positions in the oil and natural gas industry.
Rather, it’s a been a ripple effect for jobs and wages in other sectors and local businesses.
Ohio natural gas impacts other sectors
Between 2005 and 2020, marketed natural gas production in the U.S. nearly doubled, according to the U.S. Energy Information Administration. That was in large part due to an uptick in hydraulic fracturing of utica shale, a geological formation that underlies portions of Ohio, West Virginia, Pennsylvania and New York.
Halliburton opened a facility in Zanesville in 2012, has since created at least 500 jobs. AMG Vanadium, related to the oil and gas industry, is hiring 100 people for its facility opening this summer.
AMG Vanadium:New Zanesville plant will start operating this summer
Utilities are among the highest-paid jobs in Muskingum County. The average annual salary for an industry position is $84,774, according to a 2020 Zanesville-Muskingum County Port Authority area profile.
But with the jobs created directly in the oil and gas industry has come economic prosperity in other sectors too.
A towing company might do business with a gas producer and need parts. An excavator needs to maintain heavy machinery with an uptick in business. Heating and cooling contractors need to maintain vehicles to travel to new facilities being built in the region.
Zemba Brothers has been another customer that’s picked up their own business with gas companies in recent years, Moore said.
A 2020 U.S. Department of Energy report said Appalachia is the single-largest natural gas producing region with 85% of the the growth in U.S. natural gas production over the last decade having been in Northern to Central Appalachia, which includes eastern Ohio.
Other companies that have benefitted from the oil and gas industry include Strauss Fence and Dutrol Ford. The New Concord-based fencing company installed commercial chain link fence for the Zanesville Halliburton facility. The company previously reported it was one of its larger projects. And the downtown auto dealer in large part was built due to the oil and gas industry demand for parts and vehicle service, the owner said at the time.
And those companies have done hiring of their own. Higher revenue means better wages and benefits that make people want to stay on the staff, Moore said. “The thing about small business that I’ve found, we don’t have time to keep retraining employees. We have to retain employees.”
And it’s not just auto parts. Hotels in the region, namely some of Ohio’s easternmost counties where more fracking happens, have been doing well.
Retail and restaurant industry has been booming in Zanesville in particular. That’s because restaurant or retail chains may perform an area profile to decide where they’re locating that’ll include things like dispensable income and housing market, explained Matt Abbott, Zanesville-Muskingum County Port Authority executive director.
Related:Housing market booms in region, little inventory available
He added that the county has found generally with every one person hired at a high-paying job, around three more jobs are needed elsewhere. “How many car salesmen do they need to hire (to keep up)? How many restaurant workers?” he said. “The ripple effects to these positions really is astronomical.”
Average Muskingum County wages have increased from around $32,000 to $42,0000 since 2011, according to JobsEQ, software the county relies on for market data.
A criticized industry creates opportunity
A recently introduced federal infrastructure bill would invest billions into solar and wind farms, electric vehicle markets and zero-carbon energy research.
Moore believes the industry is going to continue to move toward clean energy, although fuels like natural gas may be around longer than some want.
“I think it’s much more gradual than people think it will be, otherwise we could be in a world of hurt,” she said.
Hydraulic fracturing has led the expansion in the last decade, but it’s come under scrutiny for its environmental impact. While federal research generally regards natural gas as a relatively clean burning fossil, it’s still a fossil fuel and is mainly comprised of methane, a greenhouse gas.
That means natural gas drilling runs a risk for air pollution and groundwater — in some cases, drinking water — contamination, most dangerous in communities where wells are located near homes. Noble County had an incident in January, The Columbus Dispatch reported.
Fracking waste had spilled from an oil well in Jackson Township. Containment measures were put in place and around 39,000 barrels of fluid were collected and disposed of, although the newspaper reported a nearby tributary was initially affected and an unknown number of fish were killed off.
Ohio Southeast Economic Development, a private nonprofit JobsOhio partner organization, reported the region has more than 3,300 permitted wells, with 2,800 drilled and 2,500 producing.
“The oil and gas industry has certainly been good for the region, but if you think about eastern Ohio, they used to make a lot of steel in eastern Ohio,” OhioSE President Mike Jacoby said. Coal and glass have also declined. “Now it’s providing a fraction of the jobs it used to.
OhioSE works with various industries, including energy like natural gas and solar. The nonprofit’s website lists 24 major energy companies it works with in the region.
Although it’s not just energy — historically coal, now, natural gas — that’s done well. Other industries have also thrived independently, Jacoby added: The eastern and southern Ohio region has a concentration of food processing workforce 81% above the national average, Ohio is the No. 1 state for wood furniture manufacturing.
“Certainly eastern Ohio has benefited (from gas jobs), but if you look at our entire region, there’s going to be different strengths in different parts of our region,” he said. “It’s not just one sector. We’ve gotten different strengths, different competencies.”
A lot of the future is going to be focused on information-based jobs, Jacoby added. That’s why there’s been a push to add broadband in the region but that would help really any business sector.
Related:A ‘critical asset’: Husted eyes fiber internet alternatives for Southeastern Ohio
Natural gas demand is high to heat homes and power electric plants, and prices are low due to customer proximity. All three types of gas production — upstream, midstream and downstream — have a regional presence.
Because the natural gas industry has had such a positive influence on Moore, it’s difficult to think about what the future holds if society completely turns to green energy. The store’s already added electric car batteries to its stock.
“I think we are transitioning to be less dependent on fossil fuels, but it still takes fossil fuels to manufacture those batteries,” she said. But it’s not going to happen overnight. “It’s not a light switch by any means.”