Ohio gas boom pays off for pipeline owners

7/8/2014

COLUMBUS — The operators of one of the longest west-to-east-flowing pipelines in the United States want to begin moving natural gas from Ohio back west, a clear signal that shale deposits here are paying off for some companies.

The owners of the Rockies Express Pipeline, which starts in northwestern Colorado and runs underground nearly 1,700 miles to eastern Ohio, have for the past five years used the pipeline to move gas from the Rocky Mountains to the Midwest.

In Ohio, the pipeline runs from the Indiana border north of Cincinnati, south of Columbus, and ending in Clarington, a small village in Monroe County on the Ohio River in southeastern Ohio.

Now the owners of the pipeline have filed an application with the Federal Energy Regulatory Commission to reverse the flow.

Clarington is in the middle of the Utica shale and at the edge of the Marcellus shale. Both formations have prompted a boom in drilling for oil and gas in this part of the United States. Both have made it unnecessary to ship natural gas from the west.

“There’s no way you can beat your way through the Marcellus to get to New York City or Washington or Boston or Baltimore,” said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. “So the only thing you can do is reverse direction and seek access to better marketplaces, like Chicago.”

Tallgrass Development, the majority owner of the pipeline, said in its application that the Midwest needs gas from Ohio, Pennsylvania, and West Virginia.

According to the company’s application, Tallgrass would build no additional pipelines. Rather, the company would simply reverse the direction the gas flows in Ohio, Indiana, and part of Illinois, sending it west.

The pipeline’s owners will spend about $78.3 million to retrofit stations and facilities to regulate pressure in the pipeline, according to its application.

The Rockies Express Pipeline started carrying gas through Ohio in 2009. At the time, environmentalists and landowners raised concerns about the pipeline.