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

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 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


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: