Rebound in oil and gas prices likely to bring renewed investment and jobs to portions of the Fourth Federal Reserve District, says Cleveland Fed examiner
Following a decline in energy prices that began in 2014, many companies found innovative ways to extract more oil and gas while spending fewer dollars. With energy prices again rising, those companies are likely to invest in drilling and undertake other projects that create jobs, according to John Shackelford, a senior examiner at the Federal Reserve Bank of Cleveland. Shackelford works with the federal banking regulators’ Shared National Credit Program and serves as the program’s subject matter expert on the oiland gas industry.
“The structural changes that have been achieved by the industry, involving better equipment, high–speed drilling, enhanced fracking, better mapping of fields, and new pipelines, will bring greater drilling activity inthe Marcellus and Utica fields,” says Shackelford, “and are expected to keep costs reduced by 25 percent according to industry analysts.”
Shackelford notes that in 2016, when energy prices reached their recent low, there were more than 5,000wells drilled that energy companies left uncompleted. He says these wells, a number of which are in theFourth Federal Reserve District, can be brought on line in a matter of weeks. The Fourth District includes Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
In addition, Shackelford notes plans by Shell Oil to position an ethane cracking plant near Pittsburgh, significantly shortening the distance that oil and gas must be transported for processing. According to Shackelford, such a facility could create 6,000 temporary construction jobs and more than 600 permanent facility jobs.
Federal Reserve Bank of Cleveland
The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Media contact
Doug Campbell, doug.campbell@clev.frb.org, 513.455.4479
- Share