Interview With Harlan Shober Jr. – Washington County Commissioner

 

Harlan G. Shober Jr. is the former Chairman of Chartiers Township Board of Supervisors.  Harlan was elected to the position of Washington County Commissioner and took office in January 2012.

For perspective, Chartiers Township is in Washington County, Pennsylvania.  It is a township of roughly 7,500 people, and representative of the many communities being impacted by the shale energy industry activities in the Marcellus and Utica shale plays.  The experience of the community leadership in Chartiers offers practical lessons for other communities looking to create sustainable economic benefit from a positive collaboration with the shale energy industry.  Harlan has a unique perspective shaped by his 32-year career with Bell of Pennsylvania and AT&T, as well as his entrepreneurial experience as founder and President of Shober Homes Inc.  I think you will find this interview with Harlan to be very informative.

Harlan, as Chairman of the Chartiers Township Board of Supervisors, you have had a unique opportunity to observe the community impact of the shale energy industry first-hand.  Can you share an overview of the scope of activity that is occurring in your community?

Chartiers Township has experienced the arrival of the Marcellus Shale over the last few years and has seen the impacts of a rapidly growing gas industry.  Not only have the number of wells being drilled increased (57 wells on 11 pad locations) around the township but we have three (3) Compressor Stations and one of the largest, most productive gas processing plants located here in Southwest Pennsylvania.  When we saw our neighboring township, Mt. Pleasant begin to experience this new industry, we took action to prepare for what we knew would come.

Range Resources (Well Sites) and Markwest (Processing Plant) are our predominate partners within the township.  Working closely with the representatives of these companies, we educated our board, conducted public meetings with our residents and adopted an ordinance before the drilling process began in the township.  The key to making the initial impacts less intrusive is to Educate, Communicate, Initiate Controls and Build Relationships.  Chartiers Township has had its issues, but we have a good relationship with the gas industry players working within our boundaries.

What are some of the bigger impacts the Board of Supervisors and other community leaders have had to address as a result of the shale energy industry commercial activity?

We have seen a tremendous positive impact in many areas with the introduction of the Marcellus Shale processing.

• Jobs have been created for our local workers, not only within the major gas production companies but also in all the related and unrelated businesses.  Educational programs have been introduced in our local technical schools to train students for good paying jobs upon graduation.
• Local businesses have grown: trucking, supporting product suppliers, pipe companies, restaurants, vehicle sales, hotels, etc.
• Property Rentals have increased to where there are few available in the area.
• Many properties have been purchased within the township for gas related operations and industrial sites have been targeted for potential growth.
• Landowners have experienced good times with the lease agreements and royalties that come with production.  As we have said, “farming for fun”.  This has also slowed some of the residential “sprawl” that has been a concern in some regions and will help to protect the rural green areas.
• Tax revenues have grown from sources such as permit fees; local wage and service taxes and property transfer taxes.  Chartiers Township numbers reflect $80,000 in permit fees since 2008, $36,000 in local wage taxes, $5000 in local service taxes and more than  $50,000 in property transfer taxes for 2010.
• Nonprofit organizations such as Fire Departments, 4H Clubs and many others have seen the generosity of companies like Range and Markwest in support of their efforts.
• Municipalities have roads being replaced at a rate that could not be done in years to come.  In 2010, Chartiers Township had 13.5 miles replaced at an estimated cost of $10,000,000.
• Municipal properties are also being leased resulting in additional revenues on a local level.  In Chartiers Township, the Arnold Park (31 acres) has a lease that calls for no drilling and resulted in an upfront payment of $108,000.  The Ullom Park area (60 acres) has produced approximately $100,000 in pipeline easement agreements.

As you can see, there have been many positive impacts on our community, and how we prepare for them and invest the revenues incurred are important decisions.

Have there been any negative impacts that you’ve had to develop plans for to help your community work through in collaboration with the industry?

As with any situation, there are always at least two sides in dealing with the issue.  Here are some of the things that we have experienced.

• During the construction phase with the Marcellus Shale development, roads are destroyed by the weight and repetitive use of our rural roads.  These roads were not built to withstand this use.  Residents must endure potholes, dirt, noise and heavy truck traffic during this phase.  Even though the companies involved make attempts to keep the roads passable, until the wells in the area are completed, permanent conditions are not attained.  An idea that has been discussed with Range would be to improve the road base before construction begins thus limiting the impact on the road.
• The drilling and fracking processes, pipeline and compressor station construction create noise, dirt, nighttime lighting, traffic and general disruption of the community.  Depending on the proximity of the operation to the residents, this impact is either a major or minimal concern.  This is a short-term impact in most cases and when the areas are reclaimed, the impact will be on a more limited basis.  In the production phase, the traffic is much reduced.  Keeping any of these operations a safe distance from housing is recommended.
• Fresh Water use is a concern for some and although the industry has shown statistics that indicate that they are not hindering the water supply, dry weather conditions should be considered and other sources are being explored.
• Disposal of frack water has risen to the top priority for the protection of our future environment.  Many of the drilling companies have volunteered to discontinue and dumping of this material into our streams, rivers and treatment plants.  The development of treatment processes seems to be the right solution to protect our water supplies and at the same time help prevent the spilling of frack water during transport if conditioning can be done on site.  The added benefit of this process is to be able to reuse the water thus reducing the requirement to obtain fresh water from our existing sources.
• Air quality is an extremely important issue as many of the rural areas rely not only on wells but utilize cisterns for their water supply.  Even though, DEP has sampled some air quality, not enough attention has been directed to monitor and correct, if necessary, this impact on our residents and future environment.  Proactive voluntary monitoring by the industry should be encouraged NOW until regulations are strengthened.  Any results from this monitoring should be made available to all and it should be shown in everyday language.
• Water quality and quantity has been one of the most discussed impacts in our area.  The impact on wells, springs and other surface collection techniques must be determined now, not two to three years down the road.  People’s lives are being affected and until we can show that the drilling and fracking processes, the water holding ponds and any other associated activities are not harmful and being done properly with safeguards in place, can I, as a supervisor, assure that I am during my job to protect the people.

One area receiving a lot of attention is how to ensure the industry activity benefits all citizens in a community (or state).  What are your thoughts on establishing impact fees or a severance tax?

The issue of Impact Fee or Gas Severance Tax must be closely evaluated since they will address two very different outcomes.  Remember the old statement of advice “be careful for what you wish for”.  Impact Fees, if implemented as in other industries, such as the building and development areas, normally are assessed on a one time basis to cover the impact of providing infrastructure too support the development.  If this is applied to well sites, pipelines, processing plants and compressor stations, the revenues will come in and only provide a source of money while construction is taking place.  The use of these dollars for ongoing expenses will cause a serious problem when post construction phase is entered within five to ten years.  The gas severance tax approach would provide a much longer revenue cycle and will stay in place for future production, thus providing dollars to address the local impacts as they arise.  When the big economic boom slows down and the out of state workers, the pipe companies and other construction product providers are not required as much, the ongoing revenue stream will be more appreciated.

In Pennsylvania, this issue has been partially resolved with the passage of PA HB 1950.  This new law combines some of the short and long-term revenue benefits.  The legislation places an impact fee on every well drilling for gas in the Marcellus Shale formation.  The levy changes from year to year based on natural gas prices and the CPI.

Harlan, based on your experience, what are the top 3 things you’d advise leaders in communities about to be impacted by the shale energy industry definitely make a priority to proactively plan for? 

There are a number of impacts that make sense to plan for.  But, it is important to point out that every community’s situation will be unique and the strategies selected should be appropriate for the specific circumstances in that community.  Having said that, if I had to pick only three things, I would advise community leaders to ensure they –

• Establish early communications and relationships with the gas industry players in your area and educate local officials on the process of drilling and fracking.
• Provide public education and information sessions with your residents as to what the anticipated impacts may be seen.
• Develop local ordinances that will create as much control as possible within the parameters of the law.  Be sure to include road replacement and maintenance that will assure roads are left in equal or better when drilling activity is completed.