Financial Peril for the Ohio Geologic Survey

Despite its many important roles for economic development in the state, Ohio Geological Survey still in financial peril.

The Ohio Geological Survey, established in 1837 and in continuous operation since 1900, is the statutory agency responsible for managing information relating to the natural resources of the State.

Despite the latest news touting one of those resources, the Utica Shale oil and gas play and the significant role it stands to play in Ohio’s economic recovery, the primary agency that supplies research and data to the public, regulators as well the oil and gas industry may soon face layoffs, and possibly extinction. The Ohio Geological Survey has been researching the Utica Shale for a number of years and created many of the maps and data helping us understand and characterize this potentially huge play. The Survey maintains historic data and provides it to the public as well as supporting research for Ohio’s regulatory agencies. Its geologists are well respected and are in high demand to speak at professional meetings across the nation, and is working in high gear to provide answers to inquiries from the general public, media, environmental groups, and other agencies.

Yet, because of the tight state budget, this quiet division of the Ohio Department of Natural Resources had it’s primary funding totally eliminated in July 2010 and has yet to receive any relief. It is existing mainly on federal and state research grants, many of which will end soon. This means the survey is increasingly unable to service the needs of the State, public, media, industry, et al., at a time when increasingly their services are needed, to frame public policy and understanding.

And is isn’t just science and research. An economic impact study conducted on the Survey was recently completed by Kleinhenz and Associates of Cleveland. This investigation reveals that this small agency has a big impact on the economy of the State. The analysis was based on 2010 costs and benefits (a peak year of the recession) and shows that the products, services and data provided by the Survey contributes an estimated $575 million to the Ohio economy annually – and this was before the current shale frenzy had gripped the state. The study also reveals:

• Approximately 8,740 projects were undertaken utilizing items requested from the Ohio Geological Survey. Without these items, the projected average per-project replacement cost was $65,800.
• Without Ohio Geological Survey maps and data, 17% of project costs would be needed to cover additional information gathering or research—totaling $1.5 billion per year.
• For every $1 in state revenue it receives, the Ohio Geological Survey receives 80 cents in federal grant money, not unlike an exporter of goods—bringing funding into the state and expanding the Ohio economy. Should the agency lose its federal revenue, Ohio businesses would lose $2.5 million in sales, and Ohio payroll would be reduced by $1.6 million.

Oil and gas is not the only industry that benefits from the state geological survey. Its products and expertise are also employed by mining companies, the Ohio EPA, the Ohio Department of Transportation (ODOT), other divisions within the ODNR and governmental agencies, university researchers, K–12 educators, non-governmental organizations, realtors, and a cross section of environmental and geotechnical engineering consultants. Individual landowners, municipalities, townships, and counties all benefit from the geologic archives and mapping of this agency.

The Survey receives a small percentage of mineral severance taxes collected from the oil, gas, and mining industries (the bulk of this tax goes to regulate these industries). In fact, this is the primary remaining source of state funds to the agency, but it alone would only support a staff of about six, including all overhead. And, any increase in funding from severance taxes due to the expected boost in production from the shale plays will take up to two years to make it into their coffers. Plus, it will be 5-10 years before Ohio begins to see the full production results of the shale drilling that is just now starting.

In the view of many of the Ohio Geological Survey’s frequent users, it is the best example agency that should receive support from the general revenue fund (GRF) – because of its huge impact on economic development. Those funds come from all Ohioans and all Ohioans benefit greatly from a strong state geological survey. Understanding the geology under our feet helps us make better decisions about where and how to build roads, sewers, tunnels, shopping centers and homes as well as helping us find where the oil, gas, coal, limestone, sand and gravel are best located to build and power our society. This same agency and its archives of geologic records and samples are simply our best resource for information on where not to build to protect us from geologic hazards such as shore erosion, abandoned underground mines, landslides, and karst sinkholes. These archives are irreplaceable and invaluable.

Just ten years ago this proud agency had 50 employees and a GRF budget of $2.2 million. It is now down to 23 employees with zero GRF, but still valiantly trying to cover its legislative mandates AND provide increased public service in response to the shale plays. Unlike other government agencies, the geological survey does not regulate activities, build roads, operate parks, or take money to re-distribute it elsewhere, so it may not get noticed as much by the general public. The Ohio Geological Survey quietly supports, and in many cases is the primary information source for so much within our society.

Restore funding to the Ohio Geologic Survey, it is in the interest the State of Ohio, of public safety, of common sense.