Panelists: Marcellus growth still in early stages

Posted August 1, 2013

Michael Bradwell

Panelists at Thursday’s annual energy symposium repeated a common theme: The rise of natural gas production from the Marcellus Shale has been stunningly rapid in its abundance, economic impact and adaptation to environmental challenges.

The fourth annual symposium was sponsored by the Washington County Chamber of Commerce and Washington County Energy Partners at the Hilton Garden Inn in Southpointe.

The symposium, which was emceed by state Sen. Tim Solobay, D-Canonsburg, was held in conjunction with the Mylan Classic golf tournament.

Panelists ranging from natural gas producers to regulators and supply chain specialists described how in just a few short years natural gas became a game-changer in the energy market.

“We’re still in the early stages of development,” said Scott Roy, vice president for government affairs for Range Resources Corp., the largest leaseholder in the Marcellus industry.

The Fort Worth, Texas, company, which has its Southern Appalachian Shale regional office in Southpointe, now has 300 direct employees and another 5,000 contractors working in the Marcellus.

While Range produced 10 consecutive years of double-digit growth, Roy said it wants to grow by 20 to 25 percent over the next several years.

That growth will be driven by work in its Southern Appalachian region, where Range dedicates 80 percent of its annual operating budget, he said.

Jim Grech, executive vice president and chief commercial officer for Consol Energy Inc., the largest diversified energy producer in the Appalachian Basin, and operator of the world’s largest underground coal mine in Greene County, said that coal’s use, which some say is waning, will actually grow in the next 10 years, with world demand predicted to jump by 55 percent and U.S. demand increasing 20 percent over the next two decades.

But Grech, whose company is also working in both the Marcellus and Utica Shale plays, acknowledged the sheer potential of the Marcellus, stating that gas extracted from the play could by itself power U.S. energy demand for the next 25 years.

“There shouldn’t be anything stopping us from being totally energy self-sufficient. We can do that, but we need to have some sound energy policy in our country,” Grech said.

But David Ginther, an energy industry analyst with Waddell & Reed, said the policy will probably come from industry itself, not the nation’s capital.

A long-term energy plan from Congress “probably won’t happen” because of the relatively short length of terms of its members, said Ginther, who followed energy for three decades.

While the Marcellus industry created some 240,000 jobs in Pennsylvania over the past several years, and its abundant product has lowered utility bills across the state, panelists also discussed how the industry is dealing with environmental challenges.

Venkee Sharma, president of Canonsburg-based Aquatech, described how his company helps drillers recycle fracking water, with its portable on-site treatment systems it began selling just a few years ago.

“We have to drink the water here and we have to make sure it’s right,” said Sharma, who added that “environmental issues will continue to loom large, but they are manageable.”

Kevin Garber, an attorney with the firm of Babst Calland, noted that when concerns arose about brine discharge into the Monongahela River in 2008, the industry was recycling between 30 and 40 percent of its water. Today the amount is between 70 and 80 percent, Garber said.

And if the gas boom becomes generational, as some panelists predicted, Pennsylvania will have to continue to grow its regulatory enforcement.

Patrick Henderson, the Pennsylvania energy executive for the Corbett administration, noted that today, there are 7,000 unconventional wells in Pennsylvania, including 1,400 drilled last year and more than 700 so far this year.

“This was unimaginable just six years ago,” Henderson said, adding that the state Department of Environmental Protection, with the help of the passage of Act 13 last year went from 71 gas well inspectors to more than 200.

Chris Abruzzo, acting secretary of the state Department of Environmental Protection, said the agency is preparing to add and train another 100 people to the 2,700-person agency.

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