AUGUSTA, Ohio — Ohio oil and natural gas companies are pulling out, citing a range of reasons, including cost, environmental concerns and political pressure.
The state’s top environmental regulator has called the move a “game-changer,” while the Ohio Oil & Gas Association has vowed to fight the move and has urged lawmakers to approve the state’s $4.2 billion tax hike in time.
The withdrawal by companies including Exxon Mobil Corp., Schlumberger Inc., and Marathon Oil Co. also comes after the state approved a tax hike that is scheduled to take effect next month.
The company’s board of directors said in a statement it would not return to the state, citing the state Legislature’s failure to act.
Oil & Gas Commissioner Tom Fiedler said in an interview that oil and other natural gas extraction companies had been working to find alternative sources of revenue for years and the state had made strides, but now was the time for them to start thinking about other sources of income.
“This is a major economic downturn,” Fiedlers said in the interview.
“We’ve been in this recession for years.
We’ve lost a lot of jobs.
We’re losing money on the bottom line.
This is a big opportunity to put us back on our feet.”
Exxon Mobil said it will not return because of a range, including economic downturns, to the Ohio Department of Natural Resources, which oversees oil and related fields.
Schlumbergier said it would continue operations in Ohio.
The group’s board said in its statement that it will continue its operations in the state.
A spokesman for Marathon Oil said the company has no plans to leave, but would be making a “difficult decision” about whether to expand operations in other states.
The oil and construction industry is in the midst of a deep recession as oil prices plunge to lows not seen since 2008, when global oil markets tanked.
That’s hurting drilling and extraction of oil and mineral reserves, which have been a mainstay of the U.S. economy.
The industry, which employs about 25,000 people in the U, has been hit particularly hard by the global economic downturn, with many jobs leaving the industry.
The downturn has also been hurting the state and economy.
Ohio is the fifth-largest oil producer in the nation, according to the U of A. That is the most of any state, and it also ranks second-largest in gross state product behind Texas.
The unemployment rate in the Ohio economy has fallen to 3.6%, from 5.6% in May, according the state Department of Employment Services.
The number of people working full-time fell from 3.3 million in May to 2.8 million in September, according data from the state Labor Department.
“I think there is a sense of uncertainty in Ohio about what the next couple of years are going to bring and how long the recovery will take,” said John B. Hart, chief economist at the Columbus-based Economic Policy Institute, which advocates higher taxes and spending to spur economic growth.
“We’re not going to be able to find our way into the recovery,” he said.
The economic downturn has forced state and local governments to cut back on services, and businesses have shuttered.
A new state law enacted in May requires oil companies to pay $3,000 in back taxes every year to the tax authority for 30 years.
The state budget has yet to be released.
The new law also requires the state to set aside an additional $1 billion for the fiscal year starting Sept. 1.