Marcellus Shale Companies a Boon for Local Economy
As natural gas-exploration companies move into the area, local businesses benefit.
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In Cranberry Township, as in many Western Pennsylvania towns, public debate swirls about the health and environmental impact of Marcellus Shale drilling.
But Cranberry business owner Jim Boltz can attest to one area in which the Marcellus Shale drilling boom is all positive – his bottom line.
“Even with the tough economy last year, we had an increase in sales, and a lot of that is due to new businesses like this coming into the area. I think it’s pretty exciting,” said Boltz, who owns Minuteman Press.
In the past two years, several natural gas exploration companies have established a presence in or near Cranberry. Other business owners and community leaders also said these companies are having a positive effect on the local economy.
Boltz has received calls from at least two natural gas-exploration companies, both expressing a desire to work with his and other local businesses.
“Their impact is much deeper than just who they’re hiring,” said Boltz.
Cranberry Township manager Jerry Andree agreed.
He said an economic impact analysis prepared before Westinghouse moved its headquarters to Cranberry in 2009 predicted that each job created by Westinghouse would create nine spin-off jobs.
“I would argue the same statistics are true of the natural gas companies,” Andree said.
Gax Exploration Companies Move In
Among the Cranberry-area Marcellus Shale players are Exco-North Coast Energy, a division of Texas-based Exco Resources. In 2009, Exco-North Coast Energy signed a seven-year lease on space in an RIDC Thorn Hill Industrial Park building that formerly housed Fore Systems Inc. and Marconi Corp.
Canadian-based Talisman Energy recently established a regional office in the Pennwood Commons development and announced plans to employ 125 people.
Shell also has a local presence, thanks to its 2010 acquisition of Warrendale-based East Resources.
“This area is the heart of the Marcellus Shale,” said Susan Balla, executive director of The Chamber, which serves the northern Pittsburgh, northern Allegheny County and Cranberry business corridors. “That’s why we’re seeing these companies establishing a presence here.”
Balla said the natural gas exploration companies rely on other businesses to help them grow and thrive. That creates a trickle-down effect that benefits some obvious players -- environmental engineers, water treatment companies and equipment manufacturers -- but also extends to restaurants, dry cleaners, childcare providers, and a host of other local businesses.
Cranberry engineering firm Herbert, Rowland, and Grubic, Inc. announced on its website that it hired three people in November to meet increased demand for surveying services in connection with natural gas exploration in the region.
Even the chamber has benefited.
“We sell relocation packages to human resources directors," Balla said. "Exco bought over 100 of those packages from the chamber."
Andree said Cranberry township leaders have long sought to attract corporate offices, such as those of the natural gas companies, to the area.
“We firmly believe corporations will locate their headquarters where employees and families want to live. That’s our strategy for creating economic development,” he said. “The drillers come and leave after six months, but corporate offices stay and perpetuate business long after the initial drilling boom.”
What is Marcellus Shale?
The Marcellus Shale is a 60-million acre underground swath of natural gas that stretches beneath Pennsylvania and into neighboring Appalachian states. Experts estimate the natural gas contained in the shale could supply the nation’s energy needs for the next 20 years.
The drilling boom started in 2004 and 2005 when Texas-based Range Resources drilled three wells in Washington County. The industry exploded in 2010 after advances in horizontal drilling technology.
Controversy has accompanied the industry, however, because of the process used to fracture the shale and extract the gas it contains. That "fracking" process requires large amounts of water, and the water retains chemicals that some environmental activists contend cannot be removed by traditional water-treatment plants.
In This article
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Cranberry Township Municipal Center
2525 Rochester Rd, Cranberry Twp, PA -
Minuteman Press
20325 Route 19, Cranberry Twp, PA -
J. Stephen Cleghorn
11:17 am on Tuesday, February 1, 2011
Short-run, yes there will be jobs. Long-run, based on credible studies done of energy producing counties out west, the boom and bust cycle of an energy prospecting economy leave the counties worse off than they were before. See http://headwaterseconomics.org/pubs/energy/HeadwatersEconomics_EnergyFocusing.pdf
That may be less the case in an urbanized area like Cranberry Township, but your prosperity could well come at the expense of rural economies like mine in Jefferson County where the gas industry could so industrialize our countryside that farms and outdoor recreation will suffer, or could even be ruined by water and air contamination.
J. Stephen Cleghorn
11:23 am on Tuesday, February 1, 2011
For insights on how the gas boom might affect PA counties, take a listen to this presentation by a renowned regional economist, Dr. Susan Christopherson of Cornell University. It's about a 1/2 hour presentation.
http://mediasite.cidde.pitt.edu/mediasite/Viewer/?peid=3e0aee8977274210ba1c4cd2e961ffe5
TheProspector
11:56 am on Wednesday, February 2, 2011
Stephen, doing the Math may alleviate some of your concern (or perhaps elevate them). If the Marcellus has a 20 year national supply of gas; if 10% of our gas is coming from the Marcellus; and if one assumes that these numbers stay the same (and gas usage does not increase), the Marcellus will be producing for 200 years. Obviously not a real boom/bust cycle and obviously some areas will stop producing faster than others, just as some are starting sooner than others. I also think that rural areas, such as the one where I grew up, will get along better with the drilling industry than most people believe.
Doug Johnson
12:56 pm on Wednesday, February 2, 2011
The Marcellus development will be, and already is, a huge shot in the arm to a region which has been in transformation from the steel-driven economy of the 20th century. It will have a lasting beneficial economic impact to local communities all over western Pennsylvania and it will be a vital source of clean energy for a country which desperately needs a stable and reliable supply of that.
There is an understandable fear of the unknown, which can be overcome with a reasonable review of available knowledge, especially if you can tune out the political spin. And there will always be some who benefit more than others which often causes jealousy and envy. But the trickle down effect benefits us all, as this article correctly identifies. There is no reason not to enjoy this. We are blessed that these long-term natural gas reserves have been discovered. That's a good thing.
J. Stephen Cleghorn
5:43 pm on Sunday, February 20, 2011
This is not a fear of the unknown. I know quite a bit about Marcellus drilling at this point. One of the main things I know if what is not known. There is not a single study in the country on the long-term environmental impacts of shale drilling. It is amazing to me how people who are not regional economics experts like to parrot the commercials of the gas companies as though they know something. I challenge anyone reading these comments or posting to them to go to the references I cited and read them. Reading is good. People who have expertise on regional economics are not singing the praises of gas drilling. Check it out, then talk.
J. Stephen Cleghorn
5:44 pm on Sunday, February 20, 2011
This is not a fear of the unknown. I know quite a bit about Marcellus drilling at this point. One of the main things I know if what is not known. There is not a single study in the country on the long-term environmental impacts of shale drilling. The whole business is a big gamble, and it is quite likely that the gas companies will be long gone before the full environmental impacts are recognized from hard and sad experience. It is amazing to me how people who are not regional economics experts like to parrot the commercials of the gas companies as though they know something. I challenge anyone reading these comments or posting to them to go to the references I cited and read them. Reading is good. People who have expertise on regional economics are not singing the praises of gas drilling. Check it out, then talk.
Pierre
10:52 pm on Sunday, February 20, 2011
These are all really great comments and concerns and I agree that there are MANY unknowns. Our biggest issues in the last 4 months from a real estate perspective have been determining property value for property owners that have own mineral rights. Several of our customers have sold homes with mineral rights and gas rights. It is a very complicated process and potentially worth thousands or 10 of thousands of dollars a year. However, placing a value on these rights is not an exact science. Moreover, the real estate contract is much more complicated and the deed prep is something that need to be completed by an attorney that specializes in this field.
Joseph McMurry
9:32 am on Friday, May 13, 2011
In the Bradford County Commissioners' letter to Gov. Tom Corbett detailing the negative impacts of Marcellus Shale drilling on their county, Comm. Mark Smith states: "The economic benefit of this development is unquestionable. However, it is also unquestionable that when left unattended, the negatives outweigh the positives quickly and heavily.” We have to look at the "bad" of this issue as well as the "good," because if we don't, the former will sneak up and bite us in the butt, HARD! http://www.scribd.com/doc/53477706/Letter-to-Tom-Corbett-on-Bradford-County-Natural-Gas-Concerns