What in the world is going on in Ohio?
It seems like every time I turn around, there is another energy story coming out of the Buckeye state. If I didn't know better, I'd think Ohio intends to remake itself in the image of Texas, swiftly becoming a foothold for energy innovation and production.
To be fair, it's really happening already. Home to the Utica Shale and a recent $14 million cash injection in the cleantech sector, Ohio suddenly has a very well-rounded, very compelling energy story, and it's worth a closer look.
Under the ground
The USGS published its first assessment of the Utica Shale in the fall of 2012, estimating that the play held about 38 trillion cubic feet of technically recoverable natural gas, 940 million barrels of unconventional oil resources and 208 million barrels of natural gas liquids. While producers have not had very much success coaxing oil from the Utica, the gas wells there are absolutely delivering.
As a result, several exploration and production companies are spending boatloads of cash investing in eastern Ohio's gas game. Former Chesapeake Energy (NYSE:CHK) CEO Aubrey McClendon is among them, and he plans to spend $1.7 billion developing the Utica with his next company, American Energy Partners.
The Utica is still a new play, but according to the industry blog uticashaleblog.com, permitting, drilling, and wells-producing numbers are all up more than 100% over last year.
Estimates show that Ohio could see more than $10 billion in natural gas drilling and infrastructure investment before it's all said and done.
On the road
On the verge of becoming a significant source of the country's natural gas, it makes perfect sense for Clean Energy Fuels (NASDAQ:CLNE) to start building liquefied natural gas fueling stations in Ohio. The company plans to add a station in Franklin, Ohio, located between Cincinnati and Dayton, just off I-75.
Clean Energy isn't the only one putting in this sort of infrastructure; UPS (NYSE:UPS) is making the same move. The company plans to build two LNG stations in Ohio, one each in Columbus and Toledo.
Down the line
Let's get back to that $14 million cleantech investment. Earlier this month, Cleantech Group released research on the state's compelling venture capital story. On the receiving end of all that cash were companies that fall under the following industries in the cleantech sector:
- Energy efficiency
- Advanced materials
- Energy storage
- Smart grid
In addition to these investments, Ohio sports the largest solar market in the Midwest. In fact, General Motors (NYSE:GM) just announced that by the end of November, the roof of its Toledo Transmission plant will be home to a 1.8-megawatt solar array.
Ohio will never sport the oil production numbers that Texas has, but it could very well wind up as the state that's home to the most diversified energy sector in the U.S.
Energy investors should keep an eye on Ohio.