Monroe County stands out with GDP increase
WOODSFIELD, Ohio — The Bureau of Economic Analysis issued its annual report on county-level Gross Domestic Product (GDP) in mid-December.
The report is a summary of economic activity in 62 categories of industry for the calendar year 2018.
It holds few surprises for the counties of Appalachian Ohio, most of which continue to lose population and struggle to maintain their overall economic state.
But an exception stands out in the data.
Monroe County is a near national-level anomaly, with a GDP increase of 26.7 percent over the previous year, while in all other statistical areas it remains one of the poorest counties in Ohio. The explanation is simple: Monroe is home to five of the six most productive gas wells in the state.
The county, with an estimated population of 13,790, has 332 active gas wells and accounts for nearly a quarter of all natural gas production in Ohio. The oil and gas component accounted for 85 percent of the county’s GDP.
Monroe County ranks No. 35 in Ohio for GDP and No. 87 for population. Its GDP of $3.348 billion is slightly higher than that of Washington County, which has four and half times its population.
All that wealth, according to statistics, has done little for the average person in the county. The poverty rate is 19.7 percent, 13th highest in the state, and unemployment in November at 7.8 percent was the highest in Ohio. The median household income was $43,299 for 2017, less than 80 percent of the state average.
The county, however, has derived some benefit from the energy industry developments there. County commissioner Carl Davis said sales and real estate taxes have climbed, and taxation on pipeline rights-of-way have gone to the benefit of the county schools.
“Seventy percent of those taxes go to the schools,” he said Thursday. “I know the schools are doing much better than they did before. They were pretty much in dire straits financially, and they’ve been able to do a lot of new things.”
Monroe County is home to Switzerland of Ohio Local Schools, which operates five elementary and three high schools and a career center.
According to a Monroe County fact sheet for 2015 compiled by Energy in Depth and the Ohio Oil and Gas Association, energy extraction companies paid $3.4 million in property taxes that year to the county.
The economic development consultant for the county, Jason Hamman, said the county’s unemployment figures are somewhat deceptive.
“The biggest thing for a small county like Monroe is the percent versus the raw numbers,” he said.
“While the percent is high, the total number of unemployed persons is between 300 and 400 people, that raw number is relatively small. Another thing people don’t realize is that the unemployment rate is calculated by where a person lives, it’s not necessarily a function of the job opportunities in that county. Despite the appearance of new jobs, people will remain unemployed if they don’t have the skills. When oil and gas jobs come in, that doesn’t affect the local unemployment rate.”
Davis said that during the employment-intensive phase of oil and gas extraction, when wells are being drilled and brought into production, the companies generally bring in their own crews, often from Texas or Oklahoma, because it’s highly specialized work.
Once a well is in production, most of the work is done.
“Some folks in the community work for the producers,” he said. “There might be one fellow that takes care of several units, he goes out and checks the charts.”
Meanwhile, the Ohio Job and Family Services office in Woodsfield has trouble placing people even in workforce settings to work for their benefits.
“We have trouble even with that kind of placement,” said JFS director Jeanette Schwall. “We get occasional contacts for an opening, or they’ll use our facility for interviewing, but there’s not a lot of that.”
The county was devastated by the closure of the Ormet aluminum plant in 2014, which eliminated 500 high-paying jobs. Hamman said hopes for other industrial operations are high.
“There’s a natural gas power plant at the former Ormet site, the Longridge energy terminal under construction, the Mountaineer NGL underground storage project, the ethane cracker project,” said Hamman. “The county has been working hard these past years at property acquisition and grant opportunities. We’ve got some great sites on the riverfront with barge and rail access, we’re laying the foundation so we’ll be ready for these big projects.”
It all takes time.
“Sometimes people get a little bit impatient, but economic development is a long game,” he said.
The benefits of the gas extraction industry are substantial, but aside from increased tax revenues for the county and school district, they are unevenly distributed. Some property owners have gas royalty income from leased mineral rights, but they are among the few.
Bret Allphin is the development director for the Buckeye Hills Regional Council. He said it might serve both Monroe County and the other Appalachian counties of Ohio better to place greater focus on the development of small businesses rather than big projects.
“One of the things we’ve been working on is trying to understand how to grow locally controlled wealth, assets and businesses that are sustainable,” he said. “We have a history of pinning our hopes on the next project that will create 2,000 jobs, and while they are important, they’re not everything. We’re trying to focus on things that will really sustain our communities that we have control over. It’s difficult to influence whether, for example, there will be another Eramet, but we can influence the growth of small and medium-sized business. It’s just harder and takes longer.”
Allphin said work he has done with Purdue University and the University of Kentucky has revealed some startling data. Breaking businesses into categories according to the number of people employed discloses that the region has nine enterprises with 500 or more employees, but thousands that employ fewer people.
“We put a lot of energy into those nine, as opposed to say 10 things that would employ 10 people each. I’m becoming much more interested in identifying those opportunities. I think it’s critical for our success in the future,” he said.
Michael Kelly can be reached at email@example.com