Study: Utopia Pipeline To Bring $237M in Activity

October 1, 2016
Shale Play


Shale Play

CADIZ, Ohio -Kent State University researchers believe Kinder Morgan's Utopia Pipeline project will bring about $237 million worth of economic activity to Ohio, but Harrison County organic farmer Mick Luber said many property owners along the planned route will see little of this benefit.

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Houston, Texas-based Kinder Morgan Kinder is the largest pipeline company in North America, with 84,000 miles of infrastructure.

The company wants to use the Utopia Pipeline to ship Marcellus and Utica shale ethane from MarkWest Energy's Harrison County facilities to Michigan along a 215-mile path by early 2018.

The ethane would then go Canada for cracking by NOVA Chemicals Corp. Currently, the NOVA facility receives Marcellus and Utica shale ethane via the Sunoco Logistics Mariner West pipeline.

Until recently, developers considered using Luber's property for the pipeline. Although he confirmed the company no longer plans to use his land for the project, Luber knows others will not be so lucky.

"They are looking to buy out anybody who has any opposition to them. Kinder Morgan will still do damage to some people," Luber said. "The whole thing is a mess."

Earlier this year, Kinder Morgan filed numerous lawsuits seeking the right to use eminent domain to clear the path for the pipeline path in both Carroll and Wayne counties in Ohio, but company Vice President Allen Fore said this was just part of the process of building the line.

"This is just a shallow victory for me when I see what they are doing to other people," Luber added.

Nevertheless, Kinder Morgan continues pressing forward. The Kent State study predicts the Utopia Pipeline will generate $4.9 million in tax revenue, create 2,132 direct and indirect jobs, contribute $144.9 million to Ohio's gross state product, and provide an $87.5 million uplift to the Ohio economy through additional income and spending.

"This project will produce direct and indirect economic benefits to Ohio, and plays an important role in keeping Ohio's business community thriving while growing jobs in the state," Kent State economics professor Shawn Rohlin said.

"The new pipeline will help meet increased demand for energy originating from Ohio's Utica Shale region, while also supporting a large workforce and high volume of economic activity that will generate positive impacts to communities along the pipeline route."

Kinder Morgan hopes to begin construction early next year.

The firm believes about half the contractors will come from Ohio, with Buckeye State companies providing 5 percent of the materials needed for the pipeline.

The total estimated project cost is $500 million, with $168 million for labor and $332 million for the materials.

"Ohio's Utica Shale production is driving energy industry growth, creating thousands of good jobs, powering U.S. economic growth and helping to make our nation more energy independent," Fore said regarding the results of the KSU study.

"Overall, many communities and landowners along the pipeline route are positive and welcoming of the clear benefits this project will bring to their local economy, the state of Ohio and, ultimately, the Great Lakes region."



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