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More gas drillers migrating toward W. Pa.

Business reps attend conference at BC3

BUTLER TWP — Royalties paid to Butler County landowners from the start of “unconventional” natural gas well drilling in about 2006 through 2012 have exceeded $15 million.

And research shows that about 55 percent to 65 percent of that money stays in the counties where it is created, according to Jon Laughner, a Penn State Extension educator.

In the county, Forward, Connoquenessing, Jackson and Buffalo townships are the top royalty producers so far.

Unconventional gas well drilling involves using high pressure to break open shale underground to release the gas. That process is known as fracking.

Laughner was one of several speakers Wednesday at the final session of the Butler County Chamber of Commerce’s third annual Marcellus Shale and Butler County conference series.

The series was at Butler County Community College.

Laughner said the county ranks near the top in the state in businesses created as a result of the shale gas industry. According to the state’s Center for Workforce Information and Statistics, the county was home to 30 new shale-related businesses from mid-2009 through mid-2012.

He said because of the low market price of natural gas, more producers are migrating from north-central Pennsylvania to Western Pennsylvania and eastern Ohio to tap into the “wet” gas areas of the Marcellus and Utica shale rock formations deep underground.

In addition to natural methane gas, wet gas contains other recoverable liquid compounds that can be processed and sold.

He said that according to the state Department of Environmental Protection, gas production has doubled during the past year. He attributed that to more completed pipelines allowing for previously drilled wells to start producing.

Butler County, he said, ranks 11th out of the state’s 67 counties in production.

About 50 business representatives attended the program to learn about the shale gas industry and the business opportunities it provides.

Officials from XTO Energy, Northwest Savings Bank, and other organizations also offered insights and tips on how to tap into the shale gas supply chain.

Lorie Jackson, a spokesman for XTO, which is one of the county’s most active exploration and production companies, outlined ambitious plans for 2013.

She said XTO plans to drill about 30 more wells this year and will continue to complete miles of pipelines. It also plans to open three processing facilities this year: a compressor plant in Jefferson Township in the few couple months, a liquids recovery plant in Penn Township in the summer and another compressor plant in Forward Township later.

She said because Texas-based XTO’s plans in the county are long term, it is making sure to continue to develop relationships in the community. As a result, its Appalachian basin division is always looking to use community businesses.

Several other topics were addressed during a question-and-answer session.

Regarding long-term job creation potential, Laughner said research shows the construction of gas processing facilities, which employs 300 to 400, creates 30 to 40 long-term positions.

Shuffstall added businesses with the most growth potential are tool and die shops and those that do precision machining and fabricating.

Joy Ruff, community outreach manager with the Marcellus Shale Coalition, said the state’s Act 13 of 2012, which allows municipalities to adopt impact fees, also included a section that encourages producers to work with small, local businesses through the state Department of General Services’ website.

However, she cautioned businesses must realize where they fit into the supply chain. For example, some safety certifications could be too costly for some small businesses to work directly with large producers. Instead, she said small businesses have a much better opportunity to work with other subcontractors.

Steve Catt, BC3’s director of work force development, addressed questions about how residents are being prepared for jobs in the industry.

He said BC3 and other community colleges have been training people for entry-level production jobs, which so far has been the most immediate need.

However, he said BC3 has been building on its existing courses to meet the industry’s long-term “midstream” and “downstream” needs. That would include providing basic industry and safety knowledge to professionals in a wide range of fields.

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