Wyo. Co. panel: Boom on the way

BY ROBERT L. BAKER

Wyoming County Press Examiner

The hottest natural gas boom is about to unfold in Wyoming County, more than 100 business persons were told Thursday night.

In a program hosted by the Penn State Cooperative Extension Service but co-sponsored with the Wyoming County Chamber of Commerce, Penn State professor Tim Kelsey laid out the groundwork of what the county could expect over the next few decades.

Kelsey's hour-long Power Point presentation was followed by four panelists with local roots trying to make sense of it all.

Kelsey noted up front that there were two aspects of the gas business that took pre-eminence.

The overriding issue is that the scale of what is about to happen is "BIG," Kelsey said.

But, he added, that everyone needed to understand that "what we're talking about is resource based. When the gas is gone, the gas is gone."

He said that no one really knows how long the gas in the Marcellus shale will hold out. "It could be 40-60 years or it might be 100."

But knowing that it won't be around forever means that people need to consider not just the short-term business plans but what will Tunkhannock be like when the gas is gone.

"Your goal is to make sure that when all is said and done Tunkhannock doesn't turn out worse off in the end. You have an opportunity to do it right."

Kelsey went through three economic phases of natural gas development: a development phase that is short-lived but labor intensive; a production phase that is long lived and has a steady labor force and a reclamation phase which will dismantle and reclaim the well sites.

He said that while some folks like to look at economic models in projecting what will or could happen, he prefers to look at other regions of the country that have gone through similar kinds of development and ask how that mirrors what is likely to happen in Pennsylvania.

He shared experiences from the Barnett Shale in Texas and the Haynesville Shale in Louisiana, but underscored that their dollar value in recoverable income pales by comparison with the Marcellus.

He said the Marcellus' estimated value in recoverable natural gas - just in Pennsylvania- is $1.2 trillion.

Kelsey shared some observations about labor needs.

He said that drilling each Marcellus well requires more than 420 individuals representing 150 different occupations and eventually the equivalent of 11.5 full-time direct jobs.

Once drilled, each well generates long-term 0.17 long-term full-time jobs or stated in other ways for every 100 wells 17 full-time jobs are created.

Kelsey then gave an overview of likely business activity during various phases of development, and underscored that 75 percent of the jobs created as a result of Marcellus activity would not require a college education, which speaks well for a younger generation that might wish to stay put in an area where it was raised.

He also spoke of sign-up and royalty money and said that without sounding crass, he expected it would likely bode real opportunity for non-profit groups.

In summary, Kelsey admitted that the big picture of all going on within the Marcellus was a lot to grasp, but "the real challenge for you is to decide what's important to be effective."

The panelists consisted of Rick Lochen of Peoples National Bank, Stark Bartron of Bartron Supply, Donna Labar of Century 21 Real Estate, and Brian Grove of Chesapeake Energy.

Grove said a common misperception is that its company would all be workers from Texas and Oklahoma, and he pointed to himself and his office in Towanda which has about 50 percent local people making up the workforce.

"Largely, this will become more and more a local workforce," Grove said.

Lochen spoke to providing some housing for workers at the Shadowbrook Inn which PNB presently operates, and LaBar said that the real estate market is also going to be impacted quickly as workers decide it may be cheaper to rent than stay in a motel or buy, instead of rent.

Bill Kelly who operates Taylor Rental in South Montrose and also has a store west of Tunkhannock said he was living testimony that there is opportunity to be derived from all of the gas drilling activity.

He said he had done a lot of business in Susquehanna County, and "the first thing you do is not gouge the people needing your services."

Bartron noted that the excavating part and utility vehicles in his supply business were "way ahead of last year."

His advice: "Welcome these people, make relationships with them and treat them well."

But Grove also cautioned not to get carried away by the production phase.

"Don't forget there is also great opportunity for restaurants, retail and hospitality," Grove said.

"The bottom line," Lochen noted was that some people tend to wait too long.

"Don't wait," Lochen said. "The longer you wait the longer you will miss opportunity. It will evaporate very rapidly. Develop a good sound business plan and do it early."

Kelsey said that in summary, timing is really important but relationships were really the key.

"You will have workers with dollars in their pockets and landowners with royalty checks, and you need to ask what do they need," Kelsey said.

When you figure out the answer, you're on your way.