Short and Long-Term Economic Development Impacts of the Utica Shale Play Regional Economic Development Overview Early Impacts of the Utica Shale Play Opportunity to create Sustainable Economic Development
Harry A. Eadon Jr. President / Executive Director An economic development professional with broad experience in business attraction, retention and expansion. Experienced in all aspects of accounting and financial management, Mr. Eadon brings direct experience with real estate, financial consulting and venture capital and he has developed an early-stage venture capital fund. For 12 years, Mr. Eadon has served as President and Executive Director of the Economic Development & Finance Alliance of Tuscarawas County. Mr. Eadon has successfully recruited major energy projects with Schlumberger and Select Energy and co-leads a multi-county regional economic development group in Eastern Ohio focused on economic development opportunities around the Utica Shale development.
IEDC Presentation Outline About the EDFA, TOGA, EODA Regional Economic Development Overview Demographics History Early Impacts of the Utica Shale Play Infrastructure Wealth Accumulation Capital Investment Employment Shifts Dutch Disease Opportunity to create Sustainable Economic Development Manufacturing Technology Power Generation Entrepreneurship Site Development
A Port Authority created in 2000 by the Tuscarawas County Commissioners Mission is to help assist businesses create jobs Has renovated more than 1 million square feet of Manufacturing Space Redeveloped nearly 100 acres of Brownfield Sites Issued more than $25 million in Tax Exempt Revenue Bonds for four projects Owns and Operates an 80,000 sf Public Warehouse, a 362,000 sf Business Park, and a 15,000 sf Office Building Partner with Schlumberger in 105 acre development Created the Business Factory, a small business incubator Co-Created the East Central Ohio Tech Angel Fund (at the time the second largest Rural Angel Fund in the Country) Created the Tuscarawas Oil and Gas Alliance (TOGA) Partner with EODA for Regional Economic Development
Continuing Economic Development Initiatives: Brownfield Redevelopment Financing Small and Emerging Business Development Oil and Gas Development Real Estate Development Manufacturing Development The East Central Ohio Building Authority Reeves Mill Logistics Warehouse The Arts TuscArts Feasibility Study Trail & Recreational Economic Development
TOGA s vision is that the Tuscarawas Valley Region will broadly benefit from the shale boom for generations to come. Mission Our three-pronged purpose is: - Encourage and promote the Tuscarawas Valley Region as a preferred location for companies and people working in the Utica Shale Play. - Keep appropriate, objective and valuable information flowing between relevant interest groups. - Coordinate community engagement through the following Task Groups: 1. Agriculture 2. Education, Workforce Development, and Quality of Life 3. Government 4. Hospitality & Tourism 5. Oil & Gas Industry 6. Real Estate
The Eastern Ohio Development Alliance A regional ED Organization created in 1990 Represents Sixteen Counties in Southeast Ohio the core of the Utica Shale Play Mission is to promote collaboration between the Member Counties to facilitate Economic Growth Operating Committees include: business development & marketing, education & technology, governmental affairs & public relations, and SBDC Member of the Appalachian Energy Coalition EODA Real Estate promotional effort
Regional Economic Development Overview Three County Demographics (Carroll, Harrison, Tuscarawas) Population Population over 18 Labor Force Size August 2014 Unemployment Rate Looking for a Job Median Household Income % Four Year Degree % with HS Diploma Population Growth Rate 2000-2010 Tuscarawas 92,582 70,618 45,516 4.4% 2,003 42,081 14.3% 84.5% 1.80% Carroll 28,836 22,199 14,047 4.9% 688 43,148 12.0% 83.3% 0.00% Harrison 15,864 12,392 7,218 4.7% 339 35,363 9.0% 83.6% 0.05% Total 137,282 105,209 66,781 4.5% 3,030 41,529 13.2% 84.1% 1.22% Currently more than 2,400 job openings!
Short History of Regions Economy Tradition of Manufacturing Diverse Industries Basic Skills Advanced Technical Skills Mineral Extraction Early 1900 s, Oil and Gas Boom 1800 s to present Clay and Brickmaking 1800 s to present, Coal and other minerals 1960 1980, Second Oil and Gas Boom 2011 20??, Third Oil and Gas Boom Agricultural Industry Dairy Cheese Wine Tourism Amish Enclave Outdoor Recreation
Early Impacts of the Utica Shale Play Infrastructure Wealth Accumulation Capital Investment Employment Shifts Dutch Disease
Infrastructure Challenges Road Improvements Water & Sewer Extensions and Capacity Increases Wealth Accumulation Mineral Rights Leases Royalty Payments Land Sales & Leases Capital Investment Oilfield Support Mid-Stream Downstream
Employment Shifts
Jobs in demand: Oil Field and Support Technicians Entry Level CDL Welders, through 6G Manufacturing Entry Level Technically Skilled Agricultural Service & Hospitality
So what s the problem? Complaining about success?
Dutch Disease the apparent relationship between the increase in the economic development of natural resources and a decline in the manufacturing sector, agriculture, or tourism. The mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation's other exports becoming more expensive for other countries to buy, and imports becoming cheaper, making the manufacturing sector less competitive. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment". 1 Ebrahim-zadeh, Christine (March 2003). "Back to Basics Dutch Disease: Too much wealth managed unwisely". Finance and Development, A quarterly magazine of the IMF 40 (1). IMF.
Is Dutch Disease applicable to a State or Region?
Where do we go from here? Can we move in the same but different direction?
Next Step Sustainable Economic Development Diverse Manufacturing Companies Energy Production Companies Diverse Technology Companies Entrepreneurship
Is the solution this easy?
Economic Impact of Manufacturing in Ohio --Manufacturing share of output: 17.1% --Manufacturing output 2012: $87.2 billion (5th highest) --2012 Unemployment rate: 7.2% Ohio is a major manufacturer of a range of products. In 2011, it was one of the largest manufacturers of both primary and fabricated metals products, which together accounted for about 3% of the state's output that year. The state was also the nation's leader in producing plastics and rubber products, which accounted for more than $5.3 billion in output in 2011, or 1.1% of Ohio's total output. Likely contributing to Ohio's high output of manufactured rubber products, the state is home to Goodyear Tire & Rubber, a Fortune 500 company. At the end of 2012, Ohio was one of the top states for manufacturing employment, with roughly 658,000 jobs, trailing only far-larger California and Texas.
"By 2025, the manufacturing sector alone could save $11.5 billion in energy costs," Robert McCutcheon, an economist with consulting group PwC, said at a manufacturing summit hosted by the Federal Reserve Bank of Cleveland. McCutcheon's company, formerly called PriceWaterhouseCoopers, released a study late last year predicting that as many as 1 million new U.S. manufacturing jobs could come from lower-cost energy. http://www.cleveland.com/shalegas/index.ssf/2012/05/shale_gas_boom_could_bring _man.html
We re Not Alone - One of the major impediments to the manufacturing industry in Guyana is the lack of cheap energy, which is a real challenge that will soon be overcome, President Donald Ramotar pledged on Saturday evening. http://www.guyanatimesgy.com/2014/05/19/cheap-energy-needed-to-springboardmanufacturing-industry-president-ramotar/
"We are entering a new era," says economist Jerry Jasinowski, a former president of the National Association of Manufacturers, a trade group. He and other optimists are cheered by the increase in industrial production, which has grown at a 5 percent annualized rate since the Great Recession ended. That's more than twice as fast as the economy as a whole. http://www.npr.org/2013/03/28/175483517/cheap-natural-gas-pumping-new-life-into-u-s-factories
Energy Cost Factor Wholesale Energy Cost Forecast Coal Fire Plant Closings Increased Demand For Inexpensive Electric Power Increased Uses For Plastics
Manufacturing ED supported by: Energy Production Companies Diverse Technology Companies Entrepreneurship
Energy Production Companies, like CCG
Building Manufacturing Plants around Energy Producers:
Diverse Technology Companies and Entrepreneurship Angel Funds Impact Angel Fund ECOTAF
Technology & Entrepreneurship Tolloty Technology Center The Ohio University Innovation Center The Business Factory at the Reeves Mill Muskingum County Business Incubator