Natural gas proponents see a bright future despite slowdown in drilling of Pennsylvania shale.

Last updated: May 02. 2013 11:51PM - 5752 Views
By Jon O'Connell

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SCRANTON — Energy company alliances and business groups gathered Thursday for a gas-industry pulse-check and to talk about where Marcellus Shale drilling is headed.

With drilling operations less than 30 miles from Northeastern Pennsylvania’s population centers, Helen Humphreys, a Williams energy company spokeswoman, said it is good to let the Scranton/Wilkes-Barre community know what’s happening in the industry.

Introducing one of the speaker panels, state Sen. John Yudichak, D-Plymouth Township, told the audience of about 300 in the Hilton Scranton & Conference Center that developing natural gas is essential to bringing down the region’s high unemployment rate.

“I believe the path to our economic recovery goes straight through the gas fields in the Marcellus Shale play in Pennsylvania,” Yudichak said.

Current global demand for natural gas is 63 billion cubic feet per day and output exceeds that, said Paul Smith, a demand developer for America’s Natural Gas Alliance.

Many speakers noted fewer rigs are drilling in the region than a couple of years ago. Global competition has driven down the price of natural gas, and many drillers are moving rigs to the Bakken Shale deposit in North Dakota, where crude oil development offers a strong immediate return.

Regardless, it was agreed that Marcellus development will grow stronger, just not as fast as it did a few years ago.

“We’re convinced that it’s here to stay,” Smith said.

Industry experts filled discussion panels to make examples of how their companies do business. Most said they rely heavily on local contractors, some almost entirely.

“About the only company that’s not (from the area), is our X-ray company,” said WPX Energy construction supervisor Chris Cook. “And we’re working on that.”

Cook said X-ray imaging of pipelines and well structures for safety is a highly specialized function, and he expects it will be a while before a local firm can offer these services.

While many big gas companies are looking to fill their supply chain with local companies — one speaker said it could take contributions from as many as 100 private contractors to complete a well pad — they hold their subcontractors to stiff standards. For example, Bill Springer, a buyer from DTE Energy, said contractors must have between $5 million and $10 million in insurance coverage to be considered for a bid and must be free of any regulation violations.

He said when looking for a new service provider, he often consults with subcontractors he already works with.

“The value of a good reputation is truly invaluable,” Springer said.

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