be strong for the next 20 years, and most manufacturers of frac tanks are located in other regions of the country,” notes Bloomster. “The Warren Company will have the advantage of being located more closely to the end users, therefore enabling it to continue to grow as a local supplier and provide a local resource for custom applications.” In fact, The Warren Company expects that raw material sales at its Oil City Division will increase 5 percent to 10 percent as a result of gas drilling. Custom fabrication and frac tank manufacturing in Erie could increase fabrication sales 20 percent to 40 percent. “We anticipate that the Oil City/Venango County area will benefit more than the Erie area from the Marcellus Shale drilling,” adds Bloomster. “Again this is primarily due to the geographic locations in relation to the Marcellus region. Erie is not in the core region of the area, so it will gain some benefits, but less than other areas of Northwest PA, which are centrally located.” Located in the heart of the drilling territory, Houseknecht’s Machine & Tool Co. in Hughesville, Pennsylvania, already has realized the advantages of supplying to operations in the Marcellus Shale region. According to President Galen Houseknecht, the seven-employee machine shop (CNC & Manual) is involved in repairing damaged parts and making new ones, and working with a drilling rig superintendent to make changes to fabricated and machined parts as necessary. The company has benefited from the Marcellus Shale development just from the machine work Galen Houseknecht that has come their way from the drilling and pipeline companies.
FAST FACTS
• The Marcellus Shale formation, with its huge supply of natural gas, can be found beneath about 60 percent of Pennsylvania’s total land mass, according to the Marcellus Shale Coalition. • In addition to being the largest coverable reserve at approximately 500 trillion cubic feet, the Marcellus Formation also is the closest shale play to the very large market of the East Coast and New England, therefore lowering costs of natural gas to homeowners and others because it eliminates transportation costs and charges associated with bringing gas in from the Gulf Coast or the Rockies. • Natural gas is extracted from shale by a drilling technique called horizontal drilling. First the drilling company drills vertical, and then drills horizontally. Large amounts of water are combined with sand that are blasted at the shale in order to get a fracture. The water is then pumped back out and stored. According to the Marcellus Shale Coalition, the environmental impact of horizontal drilling has about 1-percent surface
“We are able to maintain our work force and could be hiring in the future,” he says. Houseknecht’s has positioned itself to be competitive with state-of the-art machinery and technology so they can serve their customers with competitively priced parts, quick turnaround, and a quality finished product. “I believe it (the Marcellus Shale) will keep our company stable for the next several years,” says Houseknecht. “As Pennsylvania is a depressed state as far as manufacturing goes, I believe it will give the state a much-needed boost with all types of jobs (high-tech and general labor).” According to Klaber, the development of the shale gas formation is not only creating a new energy economy in Pennsylvania but also putting the country on a path to greater energy independence through safe development of clean-burning shale gas reserves. “Here we found a way to make it happen,” she says. “We’re talking about air emissions and there’s a way to lower the emissions not only from burning in our homes but the advantage of using natural gas a lot through this generation. Visionaries are looking at natural gas vehicles and how we can convert the fleet vehicles in our country to run more on natural gas, and have that be another entirely new area for domestic gas to burn.”
Illustration courtesy of the Marcellus Shale Coalition
disturbance compared to conventional wells, which have about a 20-percent surface disturbance. Pennsylvania casing and cementing regulations also are among the strictest in the United States. • Marcellus Shale activity is already expected to generate total revenues of nearly $1.5 billion for the state and local governments from 2008 through 2010. In 2009, Pennsylvania Governor Edward G. Rendell pulled back the proposal to impose taxes on gas extraction, but proposed a severance tax on February 9 of this year. Those in the natural-gas production industry oppose such a tax, saying it could actually hamper economic development. • To learn more about becoming a member of the Marcellus Shale Coalition, visit www.pamarcellus.com. The Coalition is also launching a “Friends of Marcellus” program, which will assist landowners who are benefiting or stand to benefit from shale development. May 2010 > www.mbausa.org > 13