Marcellus Shale Reserve Creating Jobs in Mahoning, Shenango Valleys
Sitting on a gold mine. That's what it's like for the Oh-Penn Region with the Marcellus Shale Reserve sitting under its feet. Located in the Mahoning and Shenango valleys of the Appalachian Basin, this bastion of untapped natural gas reserves is beckoning companies near and far to locate and expand in the region. Its potential for energy development is pumping billions of dollars of investment into the area and creating thousands of new production, manufacturing and construction jobs.
Trillions of Cubic Feet of Gas
And it's no wonder. According to the U.S. Energy Department's Annual Energy Outlook report in January, about 141 trillion cubic feet of gas can be recovered from Marcellus Shale, enough to meet U.S. gas demand for the next six years. A Pennsylvania State University study on the economic impact of the reserve found that in 2010, natural gas development in Pennsylvania generated $11.2 billion in the regional equivalent of gross domestic product, contributing $1.1 billion in state and local tax and supporting nearly 140,000 jobs.
Those numbers are expected to increase dramatically this year with natural gas production from Pennsylvania's portion of the Marcellus projected to exceed 6 billion cubic feet per day. Relatively low natural gas prices make drilling even more lucrative than ever before.
Companies Flock to Area
Drilling companies recognizing the potential are flocking to the region to build wells and tap into the shale through hydraulic fracturing, a process that involves pumping water, sand and chemicals underground to get at gas embedded in rock.
With the reserves stretching over two-thirds of Pennsylvania, the region's explosive growth in Marcellus-related jobs stems not only from drilling, but also manufacturing to support the fracturing operations.
In the Youngstown-Girard area, Houston-based affiliate companies V & M Star and VAM USA , which manufacture premium pipe connections and tubular goods, respectively, have set up extensive operations. V & M Star recently opened a rolling mill that is creating 350 jobs and producing 350,000 tons of steel tubing a year for drilling, and VAM USA has launched a $57 million expansion that will create about 100 new jobs. Both facilities are expected to be fully ramped up by the end of 2012 and into 2013. Additionally, more than 1,000 construction placements are occurring in the region.
"Home Run" for Region
Youngstown Mayor Chuck Sammarone called the activity a “home run” for eastern Ohio's Mahoning Valley area.
As drilling operations continue to increase, other companies are also moving into the region to support them.
Houston-based Exterran Energy Solutions, which specializes in natural gas compression production equipment and processing facilities, is building a new fabrication plant in Youngstown. In February, Exterran announced its plans to ramp up the 65,000-square-foot facility to service oil and gas producers in the reserves, adding about 100 jobs to the Youngstown area workforce.
Illinois-based TMK IPSCO of Naperville, Ill., has also been setting up shop to produce its tubular products in the region including oil and gas drill pipe, well casing and tubing, and line pipe related services. The company recently added a second pipe threading line at its Brookfield, Ohio plant to meet increased demand from oil and gas companies.
In New Castle, Pa., Ezeflow USA Inc. makes valves facilitating transmission of natural gas from the ground. Companies are also looking for ways to support drillers in their efforts to recycle wastewater from the hydraulic fracturing process.
Advanced Waste Services, a Milwaukee-based environmental services firm specializing in nonhazardous and hazardous waste collection, transportation and disposal, received a permit from the Pennsylvania Department of Environmental Protection to install technology to treat and remove pollutants from up to 200,000 gallons of gas well wastewater at its New Castle, Pa. plant, returning the water to drilling ponds or tanks for future use.