Panelists discuss economic impact of Marcellus

Posted November 14, 2013

Michael Bradwell
Observer Reporter

MEADOW LANDS – Public and private officials said Thursday that the economic benefits of the Marcellus Shale are many, but also acknowledged the industry could have done a better job of representing itself as the Marcellus morphed from its early exploratory form to the “shale gale” that exists today.

The panel discussion, part of the Washington County Chamber of Commerce’s Executive Insight Series, was held during a dinner at The Meadows Racetrack & Casino for nearly 300 members of chambers of commerce from across Southwestern Pennsylvania.

Moderated by Jon Delano, money and politics editor for KDKA-TV, panelists included K. Scott Roy, vice president of Range Resources Corp.; Brad Penrod, chief executive officer of the Allegheny County Airport Authority; Jodi Noble, manager for Chartiers Township; and David Spigelmyer, president of the Marcellus Shale Coalition.

When Delano asked what they considered to be the single most important contribution to the region, panelists had a difficult time limiting their answer to one item.

To Spigelmyer, the explosion of natural shale gas production has put the country on a path to energy security and created more than 200,000 jobs across the commonwealth, while setting a market price for power in just a few short years.

Speaking for the airport authority, which in February received a $50 million signing bonus from Consol Energy to extract natural gas from beneath Pittsburgh International Airport that officials say could bring as much as $450 million in royalties, Penrod listed the financial gain, as well as strong regional economic growth. Some of that growth is directly impacting the airport’s bottom line, he said.

“We’ve had a 4.5 percent increase in (airline) seats sold at the airport from a year ago,” Penrod said.

Noble said her township is benefitting from the impact fees generated from Act 13, noting that it has received $1.1 million in fees over the last two years. At the same time, because of the influx of residents to the township, it also has seen an additional $100,000 in earned income tax receipts, she added.

But panelists were equally forthcoming when Delano asked if there was anything that surprised or disappointed them as the shale boom developed.

“I was surprised in many respects that this was a story that was seemingly too good to be true,” Roy said. “The industry did not help itself. There were missteps early on.”

One of the problems, he explained, was that Pennsylvania had always had oil and gas extraction since oil was discovered in Titusville in 1859, and it quickly became accepted as a major contributor to the state’s economy.

The industry became accustomed to doing its job without much attention, he said.

While stating that he believes the modern oil and gas industry is one “people are starting to believe in, I think we have some more work to do,” Roy said.

“We’ve kind of forgotten our history,” agreed Penrod.

Noble said she was originally disappointed by the lack of communication from gas companies about projects they were initiating in the township.

“It always seemed to be a ‘just in time’ situation” as to the township receiving the information it needed to provide to residents, she said. “Now we have that communication that we can share with the community.”

Delano, who said he has interviewed a number of Democratic gubernatorial candidates who have said they would consider enacting a severance tax on gas, asked the panelists where they stood on the idea.

“The severance tax is OK if we have no interest in seeing activity increase,” Roy said. “Gas is a commodity market. We can’t pass the (increase) on to consumers.”

Penrod said a severance tax would only add to the already high corporate taxes the state charges, which he said inhibit business growth.

When asked about the importance of Shell Oil’s proposal to build an ethane cracker plant in Beaver County, Roy said such an operation would not only help producers find additional markets for ethane, but would be “key to setting up job opportunities” in manufacturing that is expected to grow with the availability of cracker-produced ethylene, which is used in everything from chemicals to plastics and fertilizer.

Wednesday’s event was attended by representatives from a number of chambers, including the Pittsburgh Airport Area Chamber of Commerce, Monroeville Chamber, Mon Valley Regional Chamber, South Hills Chamber and Pittsburgh North Chamber.

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