Ohio has oil & gas reserves to rival Saudi Arabia, energy executive says

MAYFIELD HEIGHTS, Ohio - Ohio's natural gas and oil production potential is massive, and there are ways to secure the energy resources for the future.

That was the discussion about the state's energy future with some of the leading minds in the industry, which kept the attention of the crowd at Executive Caterers Corporate Club of Landerhaven. It was moderated by NewsChannel5's Leon Bibb.

David Mansbery, president and founder of Duck Creek Energy, said the hydraulic fracturing is a necessary part of securing our energy future.

"You have to liberate the oil and gas from the rock, and it's necessary to do that with hydraulic fracturing," Mansbery said.

He said the shale in Ohio and Pennsylvania is important to the entire country. Mansbery cited what he called recent studies that show the energy reserves in that shale is immense.

"We do contain the reserves of Saudi Arabia," Mansbery said.

Duck Creek Energy has 150 wells in Ohio. It is not involved in shale fracking. Duck Creek works with drilling of conventional wells - the vertical holes.

In hydraulic fracturing, the well turns horizontal thousands of feet underground at the level of shale.

Then contracted companies pump millions of gallons of water and chemicals into the well to fracture the shale and release oil or gas, which flows back up through the well.

Fracking polarizes people, Mansbery said. And he said the facts show the recent Youngstown earthquakes had nothing to do with fracking.

In March, state regulators determined wastewater from the fracturing process likely played a role in those quakes.

"You're not going to make believers out of people that have closed their eyes," Mansbery said about the people he referred to as the "anti-fracking crowd."

In talking about the recent boom of oil and gas development, Mansbery said most of it has been on private land. He said it's time to "reach a balance" with extraction from federal land to address the energy needs of the country, but that balance depends on the political landscape.

"It also presents wonderful job opportunities, as well as security opportunities," Mansbery said.

Technology still has a way to go before alternative energy replaces traditional supplies as the primary source, the panel agreed.

Dr. David Zeng with Case Western Reserve University said he believed the traditional energy sources are what we will rely on for the immediate future. Beyond oil, natural gas, coal and nuclear sources, he said development of wind, solar and other alternative sources of energy will continue to grow as technology advances.

Growing demand

The ever-growing demand for energy in the U.S. puts enormous pressure on the electrical grid. That pressure came to a bursting point when the east coast lost all power in the Blackout of 2003.

Bibb asked what, if anything, can be done to the grid to prevent that from happening again.

James Mellody is the vice president of FirstEnergy. He answered Bibb's question this way: "If three trees in northeast Ohio can cause that big of a problem," that suggests there is much more at issue than three trees. Mellody said FirstEnergy is proactive to make sure nothing like that blackout happens again.

Bibb also asked Mellody about dependence on foreign oil. Mellody answered the best way to decrease that dependence, all natural resources in the U.S. should be developed.

"It puts us in the best position, going forward," Mellody said.

Chesapeake past peak?

Chesapeake Energy runs many of the local gas fields that have been featured in news reports over the last several months.

Chesapeake did not have a representative at the Landerhaven luncheon, but the company has been made big financial news in recent weeks. CEO Aubrey McClendon is under fire for reportedly taking out more than $1.1 billion in personal loans, against his share in thousands of drilling wells.

Shareholders have asked a judge to delay the company's annual meeting, citing the need for more disclosures about McClendon's potential conflicts of interest.

Reuters reported in an investigative expose last month EIG Global Energy Partners gave McClendon the bulk of the billion in personal loans. EIG is an investment firm that also provides significant amounts of funding to Chesapeake.

Chesapeake Energy closed at $13.55 Thursday. That is a 52-week low and it's down 42% from the end of the first quarter. At its peak, the nation's second-largest natural gas producer traded at $66.78 the week of June 30, 2008.

The company has said it could run out of money next year.