Economists debate whether Great Plains energy boom could move to Ohio

Amy Cooknick

Ohio could be approaching a population boom, if trends in the Great Plains and Texas are any indication. A report in March by the U.S. Census Bureau revealed that Texas, North Dakota, Wyoming and Kansas – states with a prominent oil and gas industry – saw the highest levels of population growth anywhere in the country between July 2011 and July 2012.

Mark Salling, research associate at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, said although Ohio has yet to see significant population growth, it could happen. With the increased employment opportunities created by drilling in the Utica shale of eastern Ohio, Salling said it would make sense for more people to begin to move to Ohio to take advantage of new jobs once the state drilling industry becomes more established.

“The areas we’re talking about have been seeing pretty serious population losses in the last 10 or 20 years, so this is really going to stabilize those populations,” Salling said. “The extent to which they actually will grow is difficult to say because there are other forces that cause population loss, but I would think that it’s going to help quite a bit in those areas.”

The Great Plains experienced steady population loss prior to the implementation of shale drilling in that region, according to the Census Bureau’s report. However, since July 2011, nearly half of all energy growth in the United States resulted from shale drilling in the Permian Basin of West Texas and in North Dakota, causing population growth by as much as 9.3 percent in those states.

Iryna Lendel, assistant director at Cleveland State University’s Center for Economic Development, said any impact drilling may have on Ohio’s population growth relies on a variety of factors outside of increased opportunity for work.

Lendel said local companies are unlikely to hire outside workers because they already have employees in state. It is common practice in states such as Pennsylvania – where the shale industry is further along – for corporations coming from out-of-state or international, to hire local workers to replace out-of-state workers over time.

However, as these workers are replaced, they typically move on rather than staying in state. How many out-of-state-residents – if any – may move to Ohio for work has yet to be seen.

“Whether that will significantly impact the employment growth and population growth will depend on this substitution rate,” Lendel said. “It’s not guaranteed that employment will grow so quickly, and population growth usually follows employment growth.”

Salling said the potential for new jobs created by increased drilling in areas like Carroll County, the center of Ohio’s oil and gas region, makes it more likely that population could be affected.

“The more jobs you create, the more population you’re going to keep and draw to the state and, in particular, to the region where the industry is taking hold,” Salling said. “I would expect the population to be either growing or stabilized in areas where there might have been population loss before.”

To date, Ohio’s Utica shale drilling industry has created 38,000 jobs and is still “in its infancy,” according to the Ohio Petroleum Council. That number could grow to 140,000 by 2020.

Contact Amy Cooknick at [email protected].