Ohio Oil Production Sputters, Complicating John Kasich’s Agenda

Jason Hart / January 19, 2015

Ohio’s oil production since 2012 has been far short of state officials’ projections. That’s according to a new report from Opportunity Ohio.

Low production plus sharply lower prices could complicate Gov. John Kasich’s plans to pay for a statewide income tax cut by hiking energy taxes, said Matt Mayer, president of the free-market think tank Opportunity Ohio.

Mayer’s analysis of records filed with the Ohio Department of Natural Resources revealed yearly statewide oil production tens of millions of barrels short of the Republican governor’s projections. (See chart at bottom.)

Ohio is one of several states where drilling for oil and natural gas has increased recently thanks to breakthroughs in hydraulic fracturing, or “fracking.”

Since 2012, Kasich has been demanding Republicans in the Ohio General Assembly increase the severance taxes energy companies—and often, landowners—must pay when oil and gas are extracted from Ohioans’ property.

In the report, Mayer explained that low oil prices and production guarantee a severance tax hike would not be the revenue source Kasich has been counting on. And even without Kasich’s tax hike, low prices and production are already driving energy companies from Ohio.

“It is critical to put Ohio’s energy production in perspective,” Mayer wrote after citing recent layoffs in the industry.

“According to Baker Hughes Rig Count, there are currently 46 drilling rigs in Ohio, as there are 839 in Texas, 209 in Oklahoma, 169 in North Dakota, 109 in Louisiana, and 53 in Pennsylvania,” he explained.

“More importantly, according to the U.S. Energy Information Administration, the Utica Shale oil production numbers compared to the Permian, Eagle Ford and Bakken formations are insignificant,” he continued. Much of eastern Ohio sits atop the Utica Shale formation.

Ohio Oil Production: Gov. Kasich’s Estimates vs. Actual Results

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