A new report by Energy In Depth and the Ohio Oil and Gas Association (OOGA) finds that oil and gas operators have paid more than $302.6 million for road, bridge and culvert improvements via the Road Use Maintenance Agreement (RUMA), which is an agreement between operators and counties to ensure road damages by heavy equipment being moved for shale drilling and pipeline work are either prevented or repaired. The report finds that RUMA funds were used to improve more than 639 miles of roadways from 2011-2017 in Ohio’s eight Utica Shale counties: Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroe and Noble. The data was provided by all eight county engineer’s and eight oil and gas operators developing the Utica Shale.
Ohio's oil and gas industry is safely producing 4.5 billion cubic feet of natural gas per day, and in doing so, providing real measurable economic impacts for the communities where they operate. Guernsey County alone received more than $50 million from RUMAs over the past several years. The county also had the greatest number of miles improved (137) since 2011 and was the second highest in road improvement costs statewide. Belmont County had the highest road improvement costs ($62.4 million) among the eight counties. Carroll County realized the second greatest number of road miles improved (99.33), and received over $12 million – three times the county engineer’s entire budget – in one year alone.
And what’s more important is that 100 percent of the money goes right to the communities where drilling is occurring. The same is true for property taxes paid on production, which have yielded over $45 million in tax payments to Utica Shale counties. Together, that’s $345 million from these two resources alone combined across the eight counties – and only from shale operators.
Those impacts aren’t any less astounding at the county level. Between property taxes paid on production and road improvements combined, Guernsey County has seen $58 million, Belmont County has received $67 million, and Carroll County has realized $59.1 million.
But that’s not all— Ohio’s oil and gas industry also supports local communities and the state of Ohio both directly and indirectly through: sales taxes, commercial activity tax, severance tax, income tax, and fuel use tax. In other words, additional tax revenues and road improvements made by pipeline companies and gas power plants, for example, are in addition to these figures.
Having this provision as part of the permit process has been a job creator, as well. Hundreds of millions of dollars spent on road improvements has translated into thousands of construction jobs and work hours to improve more than 639 miles of roads in these eight Ohio counties.
But what exactly is a RUMA? Many people don’t realize that back in 2011 there was a collaborative effort to establish a RUMA process. The proposal ultimately ended up in Columbus and was put into law as part of the rules and regulations around shale development. In fact, oil and gas operators are unable to receive a permit to drill in Ohio without first putting a good faith effort into entering an agreement to make sure the roads are going to be left in a better condition than how they were found.
This year the Ohio Department of Transportation, and Ohio’s Research Initiative for Locals (ORIL) issued a report entitled, "Best Practices of Road User Maintenance Agreements Amongst Local Government Agencies in Ohio", which found, "The proactive approach by ODOT, ODNR, and CEAO to address the horizontal oil and gas well drilling and hydraulic fracturing in eastern Ohio has worked well in addressing development activity which places an unanticipated burden on the local roadway system…. A regional task force composed of state and local agencies as well as the industry was organized to promote communication and uniformity in application of the law. A model RUMA was developed which is used as is or in modified form by more than 70% of local agencies in Ohio surveyed for this research."
Shortly after the ODOT study came out, Ohio University published their own report, "Governing Public Infrastructure in Ohio’s Shale Play: Impacts and Management," which found, "almost all interviewees stated that county roads under the purview of a Road-Use Maintenance Agreement (RUMA) were left in better condition than they were before the introduction of the industry. Increases in tax revenue from the industry led to infrastructure expansion like water and sewer upgrades, railroad revitalization, and new police vehicles. And, a majority of interviewees stated that the industry was good to work with; private industry often paid up-front costs for infrastructure improvements that benefited both their own industry operations and the local community."
As drilling and production of oil and natural gas continues to tick up, we can expect more monies going toward tax revenues and road improvements where Utica Shale development is occurring. Frankly, it’s about time that southeastern Ohio receive some added support. That’s why we started this Utica Shale Local Support Series in the first place—to make sure people know that there’s real money going directly back into Appalachia and it’s coming as a direct result of oil and natural gas producers.
What’s exciting about the investment in roads and infrastructure, in particular, is that this is a benefit for everyone. It’s a tax-free, long-term infrastructure improvement that provides the pathways for growth, increased economic development and safer transportation of people and goods in southeast Ohio.