The Politics of the Marcellus

If you don't believe the Marcellus Shale will become the biggest political football in Pennsylvania between now and November, I direct you to Senator Robert Casey (D), who continues to prove that even though he and his staff understand nothing about geological science, they aren't afraid to criticize the natural gas industry for political gain (or what they think will be political gain).

This past week, Casey publicly announced that he wants the Federal Environmental Protection Agency (EPA) to investigate water contamination reports from...guess where?...Dimock, PA.

For those of you with short memories, or for those who have tuned out the constant barrage of questions that have already been answered from Northeastern Pennsylvania, in early 2009, Cabot Oil and Gas, while drilling a Marcellus well, released natural gas from a pocket located in a higher rock formation. Upon escaping from the earth, the gas, looking for the easiest path to the surface entered a drinking water aquifer and exploded through a residential water well. Natural gas was also found in a group of neighboring water wells.

The gas was abated from the wells, and PA DEP in its own press release, told the world that the situation had been thoroughly investigated, that drinking the water was again safe to drink, and in NO WAY was this incident related to the hydrofracing process. Cabot was fined under the law.

Its important to note that natural gas -- which is what was in the Dimock water; frac chemicals were not found -- is not toxic when ingested by humans (says the CDC). Its also important to note that these private residential wells would still not be covered under the Safe Drinking Water Act if it governed oil and gas activity as Senator Casey wants it to. The Act only covers water systems that serve more than 25 people regularly.

No doubt, Cabot has been plagued with problems in its foray into the Marcellus Shale. Yet interestingly enough, its wells in Dimock and the surrounding area have been some of the most successful yet drilled. Cabot most certainly needs to be a little more careful. But its misteps in NEPA have done some good -- they've alerted the industry to regional geological conditions that need to be considered when drilling in that area, resulting in changes to how wells are cased in NEPA, where little gas drilling had been done before.

Yet even thought its been investigated and Cabot has been disciplined, Senator Casey seems to think there is still political hay to be made out of this issue -- not Cabot's other problems in the area, but this initial natural gas escape. This makes me wonder what Casey and his staff really know about the realities of living in Pennsylvania's resource rich areas. If he talked to residents who had experience in these issues, he'd find very quickly that natural gas regularly escapes from shallow rock formations -- even when there isn't a drilling rig within hundreds of miles. Its 5th grade science -- materials lighter than air (like gas) look to escape from the earth to the atmosphere whenever they can. Natural gas in shallower formations (not deep non-porous reserviors like the Marcellus) commonly bubbles up through rivers, streams, ponds, and any other avenue it can find.

So why would Casey think it necessary for EPA to come in and "study" a phenomenon that is already well understood and regularly documented in his own state? You guessed it. Partisan Politics. It'll be interersting to see what the reaction is to Casey's posturing from Pennsylvanians -- particularly those in the state that are benefitting from the jobs and economic growth the Marcellus is delivering.

What jobs?!!

Yesterday, Bill Toland of the Pittsburgh Post-Gazette wrote a story asking "where area all of the Marcellus Shale jobs?" Apparently, one economist has decided that the projections for jobs set forth in studies, particularly one by Penn State, are way overblown. To his credit, Toland did interview one of the Penn State researchers, a professor emeritus, who it seemed in his discussion was doing what most people should do with this "new information," which was dismiss it.
You've heard me talk about jobs in the Marcellus before, but this article is particularly funny to me in one specific way. The Post-Gazette, as regular readers know, runs a column various times through the week on its business pages called "Dateline." Dateline is a listing of awards won and general business news -- but mostly it lists new folks taking jobs at various companies and other personnel news. In my years practicing public relations in the area, its been one of the few sure fire hits out there. Any personnel news you submit is almost always printed within three weeks. Unless its from the oil and gas industry.
Working in the industry a few months back, I noticed that none of my personnel announcements were being printed. The first time I called, spoke to the compiler of the data, and she happily added my release. This was over a month after I sent it. The next three I sent never saw the light of day. So I asked some colleagues working at other oil and gas firms if they were seeing the same thing. The answer, almost unilaterally, was yes. None of their announcements were being printed either.
Now its no secret that the Post-Gazette has been hyper critical of the industry since the real possibilities of the Marcellus began taking form a few years back. In fact, last year, it had to eat some serious crow for deciding that fracing water was absolutely the factor causing the decimation of Dunkard Creek. Turns out, the coal industry was actually to blame. But that hasn't stopped the paper from constantly taking whacks at Marcellus development from every possible angle that it can.
But its funny to me that this paper, which prides itself on its objectivity, writes a headline and story like it did yesterday with only the opinion of only one likely anti-drilling economist to back it. If I had been writing Toland's story, I would have visited some Web sites like LinkedIn, monster.com, careerbuilder.com, hotjobs.com, oilandgaspeople.com, or a any other employment site with locally listed jobs, and counted how many related to the Marcellus exist. EQT alone has advertised for and is hiring enough people in the area to work its Marcellus initiatives to make your head spin. Sure, drillers, completions engineers, geologists, but also administrative assistants, accountants, environmental scientists, regulatory specialists, you name it. Canada's Talisman Energy is moving into the area and has held at least two major job fairs so far. Range Resources is regularly posting jobs.
But production companies aside, others are feeling the love as well. Across the country engineering firms are feeling the heat of a down economy -- but not here. They're fighting each other tooth and nail for a piece of the Marcellus pie. If you look at available jobs, you'll see local firms looking for water specialists, erosion and control engineers, specialists in endangered species and cultural resources, surveyors and so on. Not a coincidence -- all of this and more is needed to serve a client working in the Shale play.
Ask hotel/conference centers along the 79 corridor between Southpointe and Cranberry about their sales. The Hilton Garden Inn in Southpointe, The Sheraton Four Points in Cranberry and the Marriott in Cranberrry have all seen their share of meetings, workshops and conferences sponsored by some oil and gas entity. You'll even find a savvy realtor or two that will tell you all of this activity -- and those people shipped in from other areas (Gasp!) -- have helped the residential and commercial property markets here avoid the worst.
So I say to the Post-Gazette, some of those jobs are here -- and many more are coming as development increases. Don't believe me? Look at Range Resources. It started a few years back with one person in the area. It now has hundreds and is looking at designs to build its own office building in the area. More progress than most industries have made here in a while.