Marcellus field ranks at top of U.S. gas sources Ron Bartizek Business LOCAL

Two column topics reliably draw the most comments; the state Liquor Control Board and the land rush for natural gas drilling. So sure enough, last week’s piece chiding gas driller mouthpiece Marcellus Shale Coalition for presenting a rose-colored-glasses look at drilling attracted interesting observations. Most were on the “green” side of things, like this:

“Good work in exposing the natural gas industry’s lies. … This group will make the coal industry look like an environmental group.”

“Please keep up the hard work of getting the truth out there for all to read.”

Not everyone agreed with my point of view on the need for a severance tax, though. I’m pretty sure this came from Colorado, where many drillers are located:

“In your recent editorial, you express a gross lack of understanding of investment in Pennsylvania’s Marcellus Shale and what impact a severance tax may have on that investment.”

The point being, of course, that a severance tax above a pittance will drive companies to abandon the billions they’ve invested in Pennsylvania for more accommodating states. The writer gave examples like Texas, Oklahoma and Arkansas. But there is strong evidence that the Marcellus Shale is more valuable:

• According to an article in the latest issue of the industry’s trade publication Oil & Gas Journal, the Marcellus holds the most production potential of all U.S. shale gas fields, with a “best guess” estimate 50 percent above the second-place Haynesville field in Louisiana and East Texas.

• Seldom mentioned is the substantial savings in transportation expense for gas from the Marcellus. It’s been frequently reported that gas from here has a 20 percent advantage simply because it’s close to the nation’s largest natural gas usage markets in the Northeast. Plus, as shown in a graphic that accompanies today’s front page story about the life of a gas well, drillers are able to cluster near existing pipelines, which averts further expense.

Ultimately our political system will determine if Pennsylvania imposes a severance tax and if so, how the revenue is used. Even the Marcellus Shale Coalition seems to expect something, implying that it will help craft a “fair” tax. The question is; fair to whom?

Some hard work by our computer wizards has paid off in a new gas lease database available at www.timesleader.com. Go to it and you can search by name, company or an entire municipality. Just click on “Marcellus Shale” under the “Hot Topics” heading.

We wrote about them when they were blazing e-commerce stars, so we felt it was only fair to check up on Pepperjam, Solid Cactus and other local companies in the wake of the Great Recession. What Jerry Lynott found was a story of nimble entrepreneurs managing to stay afloat as the land under their feet shifted.

Three ceded control to acquirers or investors, a step that frequently leads to job loss as work is consolidated and former headquarters becomes just another field office. Fortunately, not a whole lot has yet changed yet at Pepperjam, Solid Cactus or BabyAge.

At Igourmet, founder Spencer Chesman has so far been able to keep the company intact through a Chapter 11 filing. Hopefully, July sales that exceeded the same month the past two years point to stability ahead.

The good news? Northeastern Pennsylvania was not immune to the Great Recession, but our entrepreneurs can cope as well as anyone.

Ron Bartizek, Times Leader business editor, may be reached at rbartizek@timesleader.com or 570-970-7157.