Shale oil, gas could spell resurgence in Ohio. Let’s not blow it.

April 10, 2012

by Steve Franckhauser, Esq, Director of HbK Energy

The decisions have been made: The Cracker is coming and so is the natural gas gathering and processing complex.

To most people living in the state of Ohio, all points from Jefferson County south are known as “southern Ohio.” To those who live and work there, it is simply known as the “Valley,” an abbreviated expression for the more technical description of “Upper Ohio Valley.” Further to the North, the Mahoning Valley sits nestled between Pittsburgh and Cleveland. By whatever names, these locales are buzzing—the result of two recent announcements from Dutch Royal Shell and Chesapeake place construction projects valued at between $2 billion and $4 billion and $900 million dollars, respectively. They sit within less than 60 crow flight miles of one another. As the grandson of two men named Joseph who worked for Carnegie Steel Mill (later Wheeling Pittsburgh) and Weirton Steel, the news was music to my ears.

Both of these regions share a common history and potentially, a common prosperous future. Devastated by the demise of the steel industry in particular and the continued decline of domestic manufacturing, the regions are poised for a rebound. Once again the path to renewed prosperity lies in the beautiful river from which our state gets its name and the lovely accident of geology and geography for each sit above the Marcellus and Utica Shale formations.

My recent drive south of route 7 from East Liverpool to Steubenville, on a gorgeous mid-March day, reminded me of the abundant resources we are blessed to steward in Ohio and the realities of commerce. We cannot blow this opportunity.

Location, location, location…Downtown Youngstown sits a mere 40 miles from the proposed site of the new Shell plant announced for Beaver County, Pennsylvania;  Shell estimates the project will require 10,000 people to build. Downtown Pittsburgh sits 35 miles from the site. Youngstown can also call this a “win.” The Canton/Akron metro area rests less than 60 miles from Cadiz, the county seat of Harrison County (home county of Clark Gable and George Armstrong Custer); future home of one of the natural gas gathering and processing plants announced by Chesapeake and its project partners, Midstream and EV Energy.

CPAs have four immediate challenges in the wake of these developments. To best prepare their clients to participate in the construction of these facilities OR to capture the work left behind by others. Third is to help position clients for the opportunities that will arise from a renaissance in manufacturing, and fourth, to prepare clients for the impending merger and acquisition activity likely to follow in the wake of these huge projects.

For the Shell project, direct your clients to the Shell Appalachia Petrochemical Project Inquiry form located on Shell’s website for the project.

For the project to be spearheaded by Chesapeake, learn more by visiting the Chesapeake announcement found at http://www.chk.com/News/Articles/Pages/1672307.aspx. Other good tips include familiarizing yourself with the Master Service Agreements and contractor requirements used by these companies to qualify vendors.

M&A preparation. The baby boomers first reached the traditional retirement age of 65 in 2011. Many of your clients are boomers and should look to use the next few years to increase the value of their business as they prepare to transition to the next generation in family ownership, seek to buy or be bought or look for strategic partners to meet the demands of the approaching construction activity. Selling the business during an upturn may be the golden opportunity of a lifetime.

Other opportunities. Many of you will recall when Honda built its facility in Marysville. Skilled labor and businesses came in from several states to handle the construction. Again, the law of supply and demand will be at work and the void left by those selected to participate in the new facilities will create openings for others. Encourage your clients to seek out and prepare for these opportunities by placing their financial and accounting house in order. Better days are on the horizon.

Gain additional intelligence from the special report in the March/April edition of CPA Voice and from OSCPA’s recent Oil & Gas Conference. The following sessions are now available to view on demand in OSCPA’s Online Library:

Steve Franckhauser, Esq. is the Director of HbK Energy in the Boardman, Ohio office of Hill, Barth & King LLC. Steve can be contacted at sfranckhauser@hbkcpa.com.


Don’t leave money on the table

April 5, 2012

By James D. Gottfried, CPA, Chair, The Ohio Society of CPAs

OSCPA membership has many benefits, one being the eight hours of free CPE available through the seasonal Professional Issues Updates.

If you don’t participate in these lively, interactive presentations, it’s like leaving money on the table. The fall and spring series each provide four CPE credits, worth hundreds of dollars. Attend both and your OSCPA membership might already be paid for.

Attendees frequently describe the presentations as the fastest four hours of CPE they’ve experienced. Here is your opportunity to get up-to-speed on the latest issues impacting your profession in a fast-paced, easily digested format. Topics span all areas of the profession, whether you are in corporate accounting, public practice, tax, A&A, small business, not-for-profit – whatever it is, you’ll find something that relates to you in this presentation.

Specific topics include:

  • Congress, the Ohio General Assembly and OSCPA’s legislative priorities
  • How the recession has affected the CPA profession in Ohio
  • IFRS, private company financial reporting changes and the outlook for the future
  • Current business trends and the economic outlook
  • Social media and social networking developments
  • Generational issues in the workplace

The discussions are also highly interactive – this isn’t four hours of a static, talking head. OSCPA President and CEO Clarke Price typically leads the presentation and discussion, tweaking the subject matter to the audience while seeking feedback and discussion throughout.

The live presentation also allows for candid takes on the latest issues. It is a unique opportunity to get an inside opinion and perspective on what’s really going on behind the scenes. Attendees also get practical advice on navigating the changes impacting our profession. Many leave with thoughts and goals for what they need to incorporate into their jobs the next day.

Trust me; if it’s important to your job or career, it’s covered in the Professional Issues Updates.

Corporate CPAs benefit from the connection to the Society and the profession. It’s also an opportunity to catch up with friends and former coworkers – maybe even future coworkers. For many members, it’s a bi-annual opportunity to touch base with other CPAs in their area.

If you’ve never been to a Professional Issues Update, come join us. If you have been before, bring some colleagues or other OSCPA members and introduce them to what they’ve been missing.

Editor’s note: Follow the Professional Issues Updates on Twitter with #SpringPIU.


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