Shale gas has lowered the price of electricity, prompting FirstEnergy and others to question whether rules about renewable energy and energy efficiency
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Drilling rigs like this one pictured in October, 2011, in Carroll County are becoming more common in eastern Ohio.
AKRON, Ohio -- The steady development of Ohio's shale gas is pumping hundreds of millions of dollars into the state's economy and creating a manufacturing renaissance.
That has some questioning why Ohio should continue on its course to mandate electrical energy efficiency and require power companies to embrace renewable energy such as wind and solar - all of which cut into utility sales and drive up rates.
These two themes dominated the seventh annual Northern Ohio Energy Management Conference Tuesday at the John S. Knight Convention Center.
The news about the shale gas was all good - 359 permits issued, 129 wells drilled, 27 producing and 41 drilling rigs now in the state.
The Ohio Shale Coalition, represented by Linda Woggon, executive vice president of the Ohio Chmber of Commerce, is still projecting that by the end 2014 nearly 2000 shale gas wells will have been drilled and that billions will have been spent in processing facilities.
Woggon said more than 65,580 jobs will have been created and that the total economic impact will amount to about $9.6 billion per year.
The discussions about electricity regulations and utility behavior was less about progress and more about complaining or about how to navigate the burgeoning rules that were designed to stimulate the economy by making it less energy intensive and more efficient.
The state law - that by 2025 power companies must generate 25 percent of their power with renewable or advanced technologies - "is equivalent to saying 20 percent of air travel must be by hot air balloon," said Samuel Randazzo, speaker and attorney for the Industrial Energy Users - Ohio, one of the conference's sponsors.
William Ridmann, a FirstEnergy vice president for rates and regulatory affairs, said the law approved by Ohio lawmakers in near unanimous vote in 2009 requiring energy efficiency and reneweables would not pass today as business continues to struggle its way out of the recession.
"It may be better to put some of these things back on the shelf rather than continue them as mandates," Ridmann said. "The mandates . . . distort competition and tend to pick winners and losers."
Federal programs on top of the Ohio mandates only make it worse, he said, arguing that every megawatt-hour of electricity generated by wind turbines received $55 in federal subsidy two years ago. Every megawatt-hour of power from solar arrays received $775 in federal subsidy, he said.
Ridmann complained that the law, as passed, requires utilities to cut their peak sales by 22 percent by 2025.
"The mandates are inappropriate today because of the lackluster economy and the abundance of shale gas," he said.
Steven Lesser, a member of the Public Utilities Commission of Ohio, agreed that the law would probably not be approved today.
"When (the law) was passed, all we could see what energy prices going and the idea was to reduce peak demand to prevent the construction of new power plants," he said. "The law would not be passed today."
Eric Zimmer, with the Advanced Energy Economy, a group advocating both renewable and advanced energy technologies, said new competitive suppliers coming into the state are looking to bundle renewable energy with other, more traditional sources of power.
Zimmer argued that energy efficiency is still the cheapest energy option "that can only make us stronger." And energy efficiency mandates create jobs, he said.
"Secondly, right now there are 25,000 jobs in the Ohio economy involved with energy efficiency," he argued.
Jobs were also the theme of the conference's keynote luncheon speaker.
David Mustine, managing director, energy, chemicals and polymers for JobsOhio, the privately funded development organization created by the Kasich administration, said the state's economy created 111,300 jobs between January 2011 and June 2012.
"What are the drivers? In the second quarter (of this year), the number one job creator was information technology, followed by manufacturing," he said.
"We also look at capital investment. Energy is leading the way. Advanced manufacturing is also very strong, he said.
Shawn Seanor , vice president for oil and gas specialty steel at the Timken Company, said 24 percent of the Canton company's revenues are generate by its global sales to oil and gas producers.
Timken's high-alloy steel is what drill bits are made of, for example. Timken steels also go into drill couplings, mud motors, safety valves, control valves, and swivel joints, he said.
Timken's steel sales closely follow the U.S. drilling rig counts, he said. And shale development is partially behind the company's huge expansion of its Faircrest steel plant in Canton.
While the debate about efficiency mandates and rosy job growth projections dominated the addresses to the 200 attending the conference, almost all of the 16 workshops held during the day were focused on electric rates, energy efficiency programs and technologies.
The Manufacturers' Education Council, The Council of Smaller Enterprises, the Industrial Energy Users of Ohio and the Ohio Chamber of Conference sponsor the annual conference in conjunction with FirstEnergy Solutions and six other energy consulting companies or associations.