Lackawanna College continued its education series January 29th with a program titled the Economy of Shale. Partnering with the Greater Scranton Chamber of Commerce and Cabot Oil & Gas Corporation, the college hosted Rayola Dougher, Senior Economic Adviser with the American Petroleum Institute (API), Vince Matteo, President and CEO of the Williamsport/Lycoming Chamber of Commerce, and Patricia Acker, Engineer at Linde Corp. and Chairwoman of the Scranton Lackawanna Industrial Building Corp (SLIPCO). Bob Durkin, President of the Greater Scranton Chamber of Commerce moderated the program.
Every day companies produce more and more natural gas from the Marcellus Shale. Recent estimates put daily production from the formation at over 12 billion cubic feet (Bcf). This rising production is unequivocally changing politics in the US and abroad. It is also impacting the country’s economy in more ways than people realize. However, many feel the greater Scranton and Wilkes-barre region remains untouched by the development of this resource. While other regions, especially Williamsport, a city similar in size and demographics, has taken off because of it, embracing the idea of becoming a hub for the industry.
In Williamsport, it is attractive to set up energy related business because of access to everything from transportation (highways, railways) and build-able space to a workforce and all the necessary amenities.
To quantify Williamsport’s success over the last five years, Vince Matteo explained, during the lecture,
85 to 100 new businesses have been directly impacted by the boom. There is a lot of activity inside the city. New hotels and restaurants have been built. And companies like Anadarko Petroleum Corp. and Range Resources both built regional headquarters in Lycoming County. And Halliburton has two locations and is now the county’s largest for-profit employer.
Perhaps the most identifiable thing Williamsport has done is the creation of an energy business park, a 200-acre industrial park built especially for natural gas companies like Weatheroford International, FMC technologies and Blackhawk, LLC.
While it may appear that Williamsport has already seized the opportunity, there is still opportunity for the Greater Scranton and Wilkes-Barre region.
Companies continue to look for ways to benefit from the Marcellus Shale and the closer to the resource the more benefit, especially for manufacturing businesses. To make something certain inputs are needed, most often raw materials, labor and energy. The Marcellus Shale is providing cheap energy and in some cases the raw materials, in particular propane, butane and ethane which are feed stocks for plastics and many petrochemicals. Synthetic fertilizers manufactures also benefit from these feed stocks too.
One example worth mentioning is OMNOVA Solutions based in Ohio. This company makes a number of its products from a natural gas byproduct, ethylene.“Ethylene is turned into polyethylene, which is used to make a number of products in plastics: films, paints, coatings, and many, many, other materials,” says OMNOVA CEO Kevin McMullen. “So, it is very fundamental to much our economy.” To learn more about OMNOVA check out this radio interview featuring Kevin McMullen.
During her presentation, Rayola Dougher explained Pennsylvania is on the cusp of a dramatic increase in gross state product due to the value added through responsible oil & natural gas development. The chart below depicts the projected growth. Already business in the commonwealth are benefiting from lower energy prices, she explained “most are seeing a reduction of $1200” from the cheapest energy prices in decades.
Following the Economy of Shale lecture, George Stark, Mark Volk and Bob Durkin joined David Madeira on 94.3 The Talker to recap the highlights. Many may not realize this but David Madeira spent time in Lycoming County while running for office in 2010. During this particular broadcast he noted: “things have really turned around there [in Williamsport].” The interview in its entirety can be found here: How Can NEPA Make the Most of Marcellus?Bob Durkin, President, Greater Scranton Chamber of Commerce
“We have been looking at and working with the industry for a number of years. The chamber is exploring how to be more involved. We recognize there is the boom in the northern tier, 60 -80 miles away, so we are looking for ways to make this work for us.”
One of the things echoed quite a bit, networking. We have to find ways to connect our chamber with area business. We need to focus on bringing two together. We also are looking into other businesses can benefit from this. High energy users, plastics, metals, petrochemicals, etc…
George Stark, Director, External Affairs for Cabot Oil & Gas Corporation
The Shale economy is still just taking off and there are plenty of opportunities for local business to get involved. Cabot started with just 20 employees and in just five years, we are now over 250 employees. Many of our contractors and patterns have also benefited too, like Erick Flowback Services and Linde Corporation, which has doubled its employees and tripled its revenues since the Marcellus started.
We will invest $1 billion into Susquehanna County in 2014. This will go towards infrastructure, well development, royalties’ and charitable giving. Cabot is just one of many companies currently developing the Marcellus north of Scranton.
Mark Volk, President, Lackawanna College
Speaking on the decision to get involved with the Marcellus:
About 8 years ago, the college started discussing possibilities in Susquehanna County. There was some discussion about a community college. However, the school has remained committed to offering programs in industries where the jobs are. Out of this came a willingness to step into the Marcellus Shale industry.
The school now offers two programs Petroleum & Natural Gas Technology, PNGT, and Natural Gas Compression Technology, NGCT. Plans are in the works to add two more Petroleum and Natural Gas Measurement, PNGM, and Petroleum and Natural Gas Business Administration, PNGB.