Rover Pipeline Estimated to Generate More Than $91 Million in Tax Revenue for Ohio Public Schools in First Year of Operation
North Canton, Ohio – Rover Pipeline is expected to generate more than $135 million in ad valorem tax revenue for Ohio during its first year in operation of which an estimated $91 million will be directed to more than 36 local school districts. The Ohio section of the Rover Pipeline will traverse 570 miles through 18 counties.
“It’s no secret Ohio school districts are facing decreasing financial support from both state and local sources, while at the same time, suffering from significant increases in actual operation costs, particularly the energy costs to operate their buildings,” noted Shawn Bennett, Executive Vice President for the Ohio Oil and Gas Association. “Not only will Rover provide vital tax dollars to Ohio’s schools, but the pipeline itself will deliver clean burning low-cost natural gas that will provide affordable heat and electricity for these schools and communities alike."
The ad valorem tax revenue generated by Rover may also provide additional funds for other local entities. Ad Valorem taxes are paid to local taxing authorities, which are then responsible for distributing the money based on the decisions of each taxing jurisdiction entities and used to support local needs such as: libraries, roads, hospitals, health departments and senior citizens’ centers. In total, the 711-mile Rover natural gas pipeline will generate more than $147 million in ad valorem taxes across the entire route the first year the pipeline is in operation.
Ad valorem taxes are based on the actual value of the pipeline which is the sum total of the materials used to build the pipeline, labor costs and other aspects. These taxes are paid annually while the pipeline is in service.
The Rover Pipeline will gather gas from processing plants in West Virginia, Eastern Ohio and Western Pennsylvania, traverse Ohio and Michigan, and through an interconnection with Vector Pipeline, transport gas to the Dawn Hub, a natural gas storage facility in Ontario, Canada, for delivery back into the U.S. and Canadian markets. The pipeline will deliver 68 percent of the transported natural gas to the Midwest Hub near Defiance, Ohio. The remaining gas will be delivered to Michigan markets and on to Ontario.
Rover’s route includes the following counties in Ohio: Ashland, Belmont, Carroll, Crawford, Defiance, Fulton, Hancock, Harrison, Henry, Jefferson, Noble, Monroe, Richland, Seneca, Stark, Tuscarawas, Wayne, and Wood.
Rover will have an impact on Ohio’s economy in a number of ways, including approximately $98 million that will be paid as direct compensation to Ohio landowners along the route. During construction, Rover will pay taxes generated from the purchase of materials and payroll taxes for the 4,500 – 6,500 construction workers needed to build the pipeline, just in Ohio. Furthermore, those workers will be supporting the local economies by dollars spent for food, housing, healthcare and other needs. It is estimated that Rover will contribute nearly $1 billion in direct spending to the U.S. economy.
Rover filed its formal application with the Federal Energy Regulatory Commission (FERC) in February of this year. Construction is expected to begin in early first quarter of 2016. The pipeline is expected to be in-service to the Defiance hub by December 2016, and interconnected with Vector Pipeline in Livingston County, Michigan, targeted for an in-service date of June 2017, based on customer needs.
Information on the Rover Pipeline project can be found on the Rover Pipeline website, RoverPipelineFacts.com, Information about the project can also be found on the FERC website at www.ferc.gov, Docket No. CP15-93-000.