Editor’s Note: This is the fifth in a seven-part series on natural gas drilling gleaned from a recent staff outing to Pennsylvania. It will continue each Thursday in The Evening Sun.

SUSQUEHANNA COUNTY, Pa. – For the last two years, much of the U.S. has been experiencing unemployment levels in the double digits, but not Pennsylvania’s Northern Tier.
At a time when much of the country has been seeing jobs disappear, the northeastern corner of the Keystone State has bucked the trend. Bradford County, which neighbors Susquehanna County to the west, led Pennsylvania in job creation last year, with some 2,000 new jobs created between September 2009 and September 2010.
According to Anthony Ventello, executive director of the Progress Authority, the vast majority of those jobs can be attributed to the area’s booming natural gas industry.
“The Marcellus Play has changed our lives. It dominates all local conversations and agendas,” Ventello has stated in testimony before both House and Senate committees in the past year.
And he should know, as his agency has been instrumental in connecting the dots between natural gas related-companies and local businesses and communities in such a way that the region can reap the economic rewards of the booming industry.
The Progress Authority was established in 1993 by a group of area business people who felt regional economic development dollars weren’t being used in such a way to stymie the steady loss of manufacturing jobs. Ventello, who served as Bradford County’s planner for 12 years, was an obvious choice to lead the new agency, which was initially known as the Central Bradford Progress Authority. Today, the organization serves as the regional economic and industrial development authority for Bradford and Susquehanna Counties, and plays a key role in helping create jobs and facilitate investment in the region.
While Pennsylvania’s oil and gas industry dates back more than 150 years, it wasn’t until approximately three years ago that the Northeastern part of the state began to pique the interest of large multi-national energy companies. The object of their desire? The bountiful supply of natural gas buried deep beneath the earth’s surface in the Marcellus Shale play.
“When it became obvious it was going to be a real force, we decided we had to educate ourselves,” Ventello said. That was roughly two and a half years ago.
Part of the process was reaching out to leaders in Wise County, Texas, where development was already underway in the Barnett Shale play. One of the men Ventello connected with was Kevin Burns, a Wise County commissioner.
“He was able to articulate to us all the things we could anticipate,” the economic developer explained, including both benefits and concerns. According to Ventello, Burns’ advice was spot on.
“Everything that guy told us came true,” he said.
Ventello and a contingent from Bradford County - which included county level officials and representatives from the Conservation District and Pennsylvania State University Cooperative Extension - visited Wise County. For four days, they toured well sites, visited communities and talked with local people being impacted by the natural gas industry.
“We saw every aspect,” he said.
They also traveled to Calgary, Canada to attend the GO EXPO, North America’s largest oil and gas expo. The trip was encouraged by Pennsylvania’s Office of International Business Development and funded by a state Regional Investment Marketing (RIM) grant.
They brought what they learned on each of these excursions back with them and shared it with others.
“People just want information,” Ventello said.
Not only did these trips expose those involved to different aspects and impacts of the industry but, according to Ventello, they also helped them realize that the key is not only recognizing the similarities between other gas producing areas and the Northern Tier, but also understanding the differences.
Some of those differences are the abundance of water, which created a challenge for drillers in the spring when, after the thaw, back roads turned into pits of mud. Rural residents are also more dependent on ground water for drinking, he explained, rather than municipal water supplies, leading to greater fears of contamination.
In addition, land ownership is also much more fragmented and property owners own their own mineral rights. This isn’t true in all parts of the country, he said, nor in Canada, where mineral rights are property of the Crown.
According to Ventello, there are two ways in which local communities can make money from the natural gas industry. One is through land owner payments, such as lease and royalty payments. The other is business to business.
“It’s been unbelievable,” he said, referring to the impact of companies relocating to the region and the expansion of other businesses made possible by their investment in the area.
Some of those connections have been made as a result of the Marcellus Shale Business to Business Expo held in June. Ventello chaired the planning committee for the event, which attracted 255 exhibitors. Companies large and small were involved, from large industry players like Chesapeake Energy, Talisman Energy and Chief Oil & Gas to local banks, insurance and real estate brokers, engineering firms, tourism properties, recreation, car dealerships and medical providers.
According to Ventello, the expo was such a success that a second is being planned for 2011.
While critics are quick to point out that some of these new jobs are as a result of people being brought in from outside the area, Ventello maintains that many local people are being employed in the industry as well.
“It’s to their advantage to hire locally,” he said.
A workforce needs assessment conducted by the Marcellus Shale Education & Training Center highlights the potential for industry-related job growth as natural gas development in the area increases. Funded by the Pennsylvania College of Technology, Department of Labor and Industry and Penn State Cooperative Extension, the study also identifies the current educational and training opportunities available to groom workers for these jobs.
“Nobody has really quantified this stuff (before),” Ventello said.
And don’t overlook the jobs being created in other sectors of the economy as a result of the money being spent by those related to the natural gas industry.
“Local restaurants, retail and commercial suppliers, trucking, fuel, lubricants, repairs, tires, machine shops, food, etc. - everything imaginable has had substantial increases in new business,” Ventello reported to the Senate Urban Affairs and Housing Committee in September.
The industry has also had an impact on the railroad.
“The demand for rail service has gone through the roof,” he explained.
This has affected not only the well-utilized line through Susquehanna County, but also the all-but-abandonned track through Bradford County. According to Ventello, portions of the line had been wiped out and never replaced. A private interest acquired the rail corridor, however, and put it back in service to transport the heavy materials used in the natural gas industry.
Two hotel expansion projects and one new hotel have been undertaken as well, which will both create jobs and address the area’s critical housing shortage.
There are also shortages of commercial space, he said. “Our commercial buildings got gobbled up.”
While there is a need for development to fill these needs, Ventello said the area lacks the infrastructure to support it. Which is why much of his efforts are currently focused on upgrading and expanding the sewer, water, gas and electrical infrastructure in both Bradford and Susquehanna Counties.
One of the goals, he said, is to build a generation facility which would use the locally produced natural gas to generate electricity. This would not only help meet the areas existing needs, but could also attract new industry to the area.
Ventello expresses optimism that development in the Marcellus Shale Play will buck the oil and gas industry’s typical “boom and bust” cycle. Why? He cites recent studies which have increased the estimates of the quantity of natural gas in the Marcellus region into the trillions of cubic feet range. And there are also other natural gas-rich formations above and below the Marcellus shale.
“The numbers keep growing,” Ventello said. “This could be the second largest gas play in the entire world.” The largest being the South Pars/Asalouyah play in the Middle East.
According to the economic developer, four factors play into the overall value of the region’s natural gas industry: Quality, quantity, pipeline infrastructure and proximity to market.
“The Marcellus has perfect thermal maturity,” he reported, explaining that the gas extracted from this layer is 98 percent methane and pipeline-ready, meaning it requires no downstream processing. And it is considered “sweet gas,” unlike the hydrogen sulfide and butane laden “sour gas” found in Texas’ Barnett Shale play.
The Marcellus region sits in a prime location, he said, in proximity to several major pipelines including the Millennium, Stagecoach, Tennessee and Transco lines. And it is well positioned to serve the entire East Coast, which is the largest natural gas market in the country.
The Progress Authority has recently partnered with Penn College on a study of its own, the scope of which involves analyzing and quantifying the economic impact of the natural gas industry on a more local level.
“All the other studies were extrapolations,” he said, while this will be based on metrics such as permit activity, water usage and other specific measures.
The results of the study could particularly helpful to decision makers in Chenango County, which also sits atop the Marcellus Shale play.
Like Ventello and his colleagues, interested parties from Chenango County have gone searching for answers in other gas producing areas as well - including Pennsylvania’s Northern Tier. Chenango County’s Natural Gas Consultant Steve Palmatier, Town of Preston Supervisor Peter Flanagan, Chenango County Farm Bureau President Bradd Vickers, Cornell Cooperative Extension of Chenango Executive Director Ken Smith and Shane Butler from the Chenango County Planning Department have all visited the region at least once within the last year.
Vickers has made trips there, as well as to Wise County to witness development in the Barnett Shale play first hand.
Ventello understands this desire to reach out to areas further along in development.
“They know there’s good; they know there’s bad,” he said. “They want to talk to people who have lived it, who are in the middle of it.”