CARROLLTON: Tiny Carroll County southeast of Canton is the bustling epicenter of Utica shale drilling in Ohio.And Carrollton, the county seat with 3,200 residents, is no longer a sleepy little town.The county’s one motel, a Days Inn with 43 rooms, is filled nightly with drillers in their cowboy hats. Restaurants are busy and hiring staff.A steady stream of truck traffic hauls components of drilling rigs into the county. Lights twinkle at night on newly raised 13-story derricks.Residents with gas leases are buying new vehicles and farm equipment in increasing numbers.“It’s an exciting time in Carroll County,” said Amy Rutledge, executive director of the Carroll County Chamber of Commerce.The county, which along with neighboring Harrison County is the first in Ohio to produce natural gas from Utica shale wells, expects $1 billion in drilling investments.The wealth is being spread among the population.Leases paid to landowners have soared from $3,000 to $5,000 an acre in some places, based on promising drilling tests.That means a farmer with 100 acres could get as much as $500,000 in a one-time leasing bonus.Many of the farmers with drilling lease bonuses are buying long-needed farm equipment, which will also lessen their federal tax hit, the chamber’s Rutledge said.“Farmers are generally pretty frugal, and most people around here aren’t being overly extravagant with the new money,” she said. “People aren’t going crazy.”As of a week ago, permits for 23 wells had been issued for the county by the Ohio Department of Natural Resources’ Division of Oil and Gas Resources Management.Eight have been drilled in Carroll and an additional eight are under construction, all by Oklahoma-based Chesapeake Energy Corp. Hundreds more are planned by Chesapeake and other companies. Two wells already are in production, and the remaining six have been capped until pipelines can be installed, local officials report. Ohio’s potential natural gas boom is slowly taking shape. Drilling permits have been secured in 18 counties across eastern Ohio.Just getting startedIt began in late 2009 as landmen and drilling companies aggressively assembled leases to lock up drilling rights on thousands of acres. The bulk of the leasing is completed in Carroll County.Companies have quietly drilled initial wells and are analyzing the results to determine where they want to drill next.“Right now, they’re all permitting, but this play is still in its infancy…and it’s just getting started,” said Tom Stewart, executive director of the Ohio Oil and Gas Association based in Granville.The drilling companies are still exploring underground Ohio, seeking “sweet spots” that will produce the most natural gas, oil and so-called wet liquids (butane, ethane and propane), he said.State officials estimate that Ohio's Utica shale could produce 15.7 trillion cubic feet of natural gas and 5.5 billion barrels of propane, ethane and butane, if only 5 percent is recovered via drilling. Oil also will be recovered. That’s worth tens of billions of dollars and is enough to fuel Ohio for 21 years.The preliminary result is that the Utica shale in Ohio will be a liquid-rich play, the experts predict.Ohio has a very confusing counting method, and one must be careful in assessing the numbers.In most cases, two state permits are needed for each well: one for the vertical shaft and one for the horizontal shaft — although some can have more than one horizontal offshoot.To date, Ohio has permitted 76 horizontal wells, of which 14 have been drilled, according to state data.Fifty-eight vertical wells have been approved, of which 11 have been drilled. But the state is not counting vertical wells after they are attached to horizontal legs, so the total is actually larger, but no one can say how much larger.All but three of those permits were issued just this year. To date, Carroll County has 31 permits.Most of the permits are being issued in counties along or east of Interstate 77 and south of the Ohio Turnpike, including Columbiana (16 permits), Jefferson (18 permits), Mahoning (13 permits) and Guernsey (11 permits), according to state records. Locally, eight permits have been issued in Portage County for sites in Freedom, Palmyra and Suffield townships, and seven in Stark, in Marlboro, Bethlehem, Washington and Osnaburg townships. Medina County has two permits near Lodi, but none has been sought in Summit or Wayne counties.Other counties with permits are Tuscarawas (seven), Noble (eight) and Ashland (three), state records show.Based on recent leasing activity, the state expects drilling to move north and west soon, including Ashtabula, Geauga, Trumbull and Noble counties, said state spokeswoman Heidi Hetzel-Evans.The number of permits is likely to keep growing month to month “on a steady basis,” she said.Who is involvedThe biggest player in Ohio is Chesapeake Energy with 96 permits to tap into the Utica shale that lies in bands up to 300 feet thick 6,000 feet below ground.Chesapeake Energy has invested $2 billion to lease 1.5 million acres in Ohio. It has said it may drill 12,000 wells in Ohio and its holdings could be worth $20 billion. Each well can cost more than $6 million.The company has boosted the number of drilling rigs in Ohio from five to eight this year.It may have as many as 20 rigs in Ohio by late 2012 and 40 by 2014, the company said.Other players include CNX Gas Co., Eclipse Resources, Anadarko E&P Co. LP, Devon Energy Production and EnerVest Operating.To date, the drillers have been very secretive about their discoveries. But Chesapeake Energy has said that three of its first wells, two in Carroll and one in Harrison, are extremely productive.Chesapeake later changed its policy of disclosure because the information had pushed up the prices the company was paying for leases.The companies are not required to report well production data to the Division of Oil and Gas Resources Management until March 31. Ohio is expecting as many as 4,000 wells drilled into the Utica shale in the next four years as more rigs are moved into the state.Site preparation takes three to four weeks. Drilling takes three to five weeks more. Fracturing a well takes seven to 10 days.Marcellus shaleIn addition to the Utica drilling, there is limited drilling in Ohio into another shale: the Marcellus shale.It is a very productive shale in Pennsylvania, where more than 4,000 wells have been drilled in recent years. It also spills over into Ohio, New York, West Virginia and western Maryland. But the Marcellus shale is generally shallow and not very lucrative in Ohio.There are Marcellus wells in five Ohio counties: Monroe, Belmont, Jefferson, Carroll and Harrison.The Division of Oil and Gas Resources Management has approved five vertical wells, two of which have been drilled, and an additional 11 horizontal permits, of which six have been drilled.The horizontal wells in the Utica and Marcellus shale require the use of hydraulic fracturing, or fracking. It is a controversial method of gas extraction that has triggered concerns in some circles.The method relies on the use of pressurized water, sand and certain chemicals to break loose more natural gas.The method has been used for 50 years and has not caused problems, the industry says.Critics are worried that the fracking could threaten groundwater and that such gas drilling will worsen air pollution.Under Ohio law, the liquid from fracking must be pumped via injection wells into underground rock formations to minimize problems.The early drilling is already having an impact on Carroll County with its 29,000 residents.In addition to Chesapeake and
EnerVest, Rex Energy Corp., based in State College, Pa., is involved. It has leases on 11,000 acres in Carroll County, plus operations in Butler and Mercer counties in western Pennsylvania. It paid leasing bonuses of $3,600 an acre in Carroll County.The drilling has generated little opposition in Carroll County, in part because so many residents stand to benefit from drilling success and because of the county’s history of drilling and mining, Rutledge said. There is some concern about drinking-water aquifers, she said.The county’s potential yields are “staggering numbers … that we hope really come true,” she said. “All we can do is wait and see.”Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.