Group touts region as a powerhouse in the energy sector

Posted September 2, 2010

Mike Bradwell

CANONSBURG - If natural gas yields from the area's Marcellus Shale play continue to build as expected, Washington County and the Pittsburgh region could soon be hosting increased manufacturing activity and transportation that's increasingly propelled by compressed natural gas-powered vehicles - from school buses and taxis to cars and delivery trucks.

That glimpse of the future was offered among various topics discussed by nine members of the Washington County Energy Partners during a 2 1/2-hour forum Tuesday at Consol Energy headquarters at Southpointe.

The forum, which drew about 100 people from business and economic development groups, also screened a 30-second television commercial advertising Washington County as "The Energy Capital of the East" that will air throughout the Golf Channel's coverage of the Mylan Classic Nationwide golf tournament that begins today at Southpointe Golf Club.

Tuesday's forum was the first sponsored by the energy partners since their formation in May. The group, chaired by Community Bank Chief Executive Officer Pat McCune, is composed of elected officials, development organizations, banks and energy companies.

McCune began the event by screening the commercial produced by Creative Visions of Washington that describes "a new energy in Washington County, Pennsylvania."

Jeff Kotula, executive director of the Washington County Chamber of Commerce, who worked on the spot with John Swiatek of Pittsburgh-based GSP Consulting, said it will air throughout the Golf Channel's continuous broadcast of the Mylan Classic, reaching 1 million viewers around the world.

The commercial's broad-reaching message, intended to invite other energy-related companies to bring operations to the area, was reflected in some of the comments made by forum members Tuesday.

Consol Energy and CNX Gas CEO J. Brett Harvey, who welcomed the members, said the resources being extracted here by Consol and other energy companies can help end America's dependence on foreign oil.

"This is not energy we're carrying around the world; this is our energy," Harvey said. "This is red, white and blue energy."

He noted that 80 percent of the electricity generated in the Pittsburgh area comes from coal, and that 30 percent of all economic coal in the world is in the United States.

Where natural gas is concerned, Harvey said, the resource is "a baby compared to Consol's coal business," but he added that with the potential of the Marcellus Shale play, there is at least 80 years of natural gas supply.

Ray Walker, senior vice president of Range Resources and an energy partner, said that despite current low prices for natural gas, Range and other companies remain committed to drilling in the Marcellus Shale because of its size - it is the second-largest shale deposit in the world.

Walker and other panelists noted that the location of the Marcellus, which sits within 300 miles of 60 percent of the population of North America, makes it an economically potent natural resource.

Washington County Commissioner Bracken Burns said as more Marcellus gas is produced, there will be the opportunity for gas usage closer to home, particularly for transportation.

Burns said he has asked the Allegheny Conference to call a meeting of all gas drillers, the auto industry and the pipeline industry to discuss ways of creating infrastructure to make Western Pennsylvania CNG-friendly.

"Let's not ship it to Louisiana. Let's put it in a (vehicle) to drive our kids to school with it," Burns said, adding that some area companies and school bus operators are already looking at ways to convert their fleets to CNG operation. Noting that CNG has 75 percent lower emissions than gasoline, he said the state should also be considering conversion to natural gas vehicles.

There also are opportunities for the area to attract manufacturers who need large amounts of natural gas to fuel their operations, according to Kathryn Klaber, executive director of the Marcellus Shale Coalition. She also noted that distillates extracted from Washington County's "wet gas" are feedstocks for certain industrial operations. She said that with the gas and distillates being produced cheaply and in abundance, the area can attract industries such as those producing chemicals, pharmaceuticals and propane.

Walker, Harvey and others acknowledged that a balance must be struck between the shale's numerous economic benefits and its impact on the environment.

Walker noted that Range has made progress in recycling wastewater in its fracking operations and is now reporting all of the chemicals it uses in its fracking fluids.

State Rep. Jesse White, D-Cecil, said that any proposed legislation needs to "protect the environment but not choke out the industry."

U.S. Rep. Tim Murphy, R-Upper St. Clair, said that with the U.S. "maxed out" on its credit, Western Pennsylvania, which produces everything from coal to natural gas to nuclear energy technology, should be viewed as "the energy center for America," helping the country embark on energy independence and in the process reduce its massive trade deficit.

Some of the economic benefits of the Marcellus are already being noticed locally. Walker reported that Range has paid out $1 billion in royalties to landowners over the past three years. Range's own operations now employ 400 people in Pennsylvania, and it supports an additional 5,000 jobs, he said.

Kotula said the chamber frequently hears from hotels that have seen occupancy levels go to nearly 90 percent and local restaurants that report annual business increases of 10 percent as a result of the drilling activity.

As an economic development organization, Kotula said the chamber's recent efforts to bring businesses to the county have been primarily focused on the energy industry.

"Ninety percent of the companies we have dealt with are all energy-related," he said, adding that the Marcellus activity has been responsible for keeping the county's monthly jobless figures below national, state and regional levels during the recession.

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