Marcellus & Utica Shale – “Doing it Right”

As a Board member of the Nemacolin Energy Institute, I had an opportunity to attend the 2nd Annual Marcellus Shale Conference and Golf Invitational. The program included educational talks from both elected officials and experts in the shale gas industry. The main message take-away from all of the speakers was that shale gas is a resource the industry and public sectors must work collaboratively to develop in a responsible way. Even side conversations among attendees reinforced the idea that good stewardship of the resource and environment was a shared responsibility. For me, it was encouraging to see genuine alignment that “doing it right” is job #1.

The program started with U.S. Congressman Mark Critz (PA-12) and U.S. Congressman Bill Shuster (PA-9) participating in a discussion moderated by Jim Samuel (CEO and Founder, Capital Integrity Group). Both Congressmen cited the historical role Pennsylvania played as an energy center in the development of our nation. For perspective, since virtually the beginning of the American Industrial Revolution, Pennsylvania has been an important coal state. It is also an important producer of natural gas. In 1957, the country’s first commercial nuclear reactor prototype was built in Shippingport on the Ohio river, and the state has become a national leader in developing utility-scale wind power. More recently, Pennsylvania has seen the establishment of new solar-electric, or photovoltaic, manufacturing and marketing companies. The Congressmen emphasized the important role industry should play in public education to ensure citizens in communities affected by drilling operations understand facts about shale gas. They also talked about the need to enact and enforce appropriate state regulations that protect the pristine nature of the environment Pennsylvanians currently enjoy.

Dr. Diane McLaughlin, Professor of Rural Sociology & Demography at The Pennsylvania State University, shared a preliminary look at some data from a market research study currently in the field. The data suggest the shale gas industry has work to strengthen trust of citizens. Dr. McLaughlin emphasized the importance of reducing fear by providing fact based education of the community prior to drilling, and by quickly addressing any problems or concerns raised by citizens when the drilling operations begin. For example, keeping heavy equipment off the road while school busses are picking up or dropping off children. Diane also spoke about the downside risk of creating boomtowns and the importance of collaboration between the industry and community leaders to create effective local strategic plans to minimize the risk of the characteristic boom – bust – recovery cycle. My own interpretation of Dr. McLaughlin’s message is that with proactive collaborative planning, communities can end up in a better economic position after the shale gas resource is depleted than before the drilling began.

Governor Corbett spoke and summed his platform succinctly as “Energy = Jobs”. Governor Corbett emphasized the need to “do it right” so the job creation potential of the Marcellus Shale Play could be fully realized. He highlighted that “doing it right” was in the mutual best interest of the industry and the Commonwealth. Governor Corbett called for fact based and not fear based decision-making.

The Honorable David Mustine (former Director of the Ohio Department of Natural Resources) and Honorable Mike Krancer (Secretary, Pennsylvania Department of Environmental Protection) discussed the importance of appropriate state regulations to ensure effective stewardship of both the Marcellus and Utica Shale Plays. Secretary Krancer shared that over one million wells using hydraulic fracturing have been drilled nationally since the technology was developed in the 1960s, and not a single instance of direct groundwater contamination has been tied to the process. Both echoed Governor Corbitt’s theme of focusing on facts and the importance of “doing it right”.

Throughout the two-day Conference, industry leaders also spoke. Each emphasized the important role shale gas commercialization can play in helping the U.S. economy recover and in creating good paying jobs for citizens in and around communities where drilling operations occur.

The last speaker at the Conference was The Honorable Tom Ridge (President & CEO, Ridge Global LLC, First Secretary, U.S. Department of Homeland Security & Former Governor, Commonwealth of Pennsylvania). Tom spoke about the importance of shale gas in helping the U.S. become less dependent on foreign energy sources. He highlighted how development of the full range of energy sources from nuclear to renewables, including shale gas, will help minimize the ability of foreign nations to engage in “energy diplomacy” to force the U.S. to accept positions that are inconsistent with our nation’s best interests. “Doing it right” was clearly in everybody’s best interest.

When the Conference concluded, my optimism for effective public/private collaboration in developing the opportunity presented by the Marcellus and Utica Shale Plays was even further strengthened. And, my commitment to the Mission of the Nemacolin Energy Institute was redoubled. Based on the interactions I had with both industry leaders and public officials at this Conference, I amconfident the Marcellus and Utica Shale Gas Plays will be appropriately developed.

RELATED LINKS

Here are some reliable resources for factual information about the Marcellus and Utica Shale Plays.  Please consider sharing them with others as you feel is appropriate.

Ohio EPA

Geology.com

Pennsylvania Environmental Council

Ohio DNR

Oil Shale Gas

Penn State Marcellus Center

Pennsylvania DEP

OSU Ag and Natural Resources

DISCUSSION

The impact of shale gas exploration and commercialization is a fascinating case study in the making.  There will certainly be a number of important lessons on how to effectively manage disruptive changes that impact local community economies. As economic development professionals, if not directly involved we should be closely watching this case study as it unfolds. If directly involved, we should be doing everything possible to lead our communities to sustainable economic prosperity and help local leaders actively plan to avoid the potential of a boomtown phenomenon.

If you have experience or advice, please share.  Hopefully. I have expressed my personal sense of optimism that Governor Corbett’s mandate to “do it right” has been embraced by both the industry and public sector leadership I have met.  I am genuinely encouraged by what I am seeing and excited to see this energy opportunity realized for the benefits of the Region’s economy and our Nation’s security.

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Category Leadership, Place Brand Building, Shale Gas, Strategy

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6 Comments so far

  1. Ed Burghard

    October 8, 2011

    Here is some additional perspective on the event authored by Tejas Gosal founder of TheMarcellusShale.com initiative.

    http://themarcellusshale.com/2011-marcellus-shale-golf-invitational/

  2. Brett Hayes

    October 10, 2011

    In answer to your question, “what are your thoughts on how a community should handle disruptive change like shale gas commercialization?” Embrace it! What an opportunity for the surrounding communities. Not only in terms of finanacial growth, but mentally, I can think of nothing more exciting than being a part of a real answer to a real issue. I’m sure there will be some politics that get in the way of progress, but if the communities and the region control the trivial idiocies of the politicians, wow, what an oppotunity.

  3. Phillip Newmarch

    October 30, 2011

    To quote “Secretary Krancer shared that over one million wells using hydraulic fracturing have been drilled nationally since the technology was developed in the 1960s, and not a single instance of direct groundwater contamination has been tied to the process. Both echoed Governor Corbitt’s theme of focusing on facts … ”
    One might say “Now, is that a FACT?”

    The history of the technique of hydraulic fracturing appears to go back a long way – something like 1920 or 1930. Perhaps 1960 is when it became a bit more common. But until about ten years ago, it seems to have been mostly used on conventional wells, usually pre-existing ones, which would not have been virgin territory. It is only in the last 10 years that shale-gas has been extensively exploited.

    1 million wells in 100 years would be an average of 10 000 per year. Now, if we suppose that the rate of drilling has increased by about 7% per year over the century, that would put the current rate at about 50 000 wells per year. As far as I can determine, that seems to be 5 to 10 times the actual drilling rate in the USA at the moment. So where are the million wells? Certainly not in the shale-gas fields.

    ‘Sticking to the facts’ is not quite the same as ‘Sticking IN the facts’.

  4. Ed Burghard

    October 30, 2011

    @Phillip –

    Here is a link to a recent Penn State study that looks at the safety of fracking –
    http://stateimpact.npr.org/pennsylvania/2011/10/25/study-finds-little-evidence-of-water-contamination-from-fracking/

    It is a fact Secretary Krancer made the claim in a talk as I reported in the post. For perspective, according to the Institute for Energy Research, fracking technology was actually first used in 1947 and has been used in more than 1 million wells. I do not know for a fact, but my guess is the Secretary was quoting data reported by this Organization. Here is the link, it contains more information on the subject –
    http://www.instituteforenergyresearch.org/2011/05/03/hydraulic-fracturing-is-it-safe/

    Here is the original source of the claim –
    http://www.energyindepth.org/in-depth/frac-in-depth/

    I hope the above references are helpful.

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    April 26, 2013

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    July 3, 2013

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